City of San Marcos,
California
ANNUAL COMPREHENSIVE
FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
Prepared by the San Marcos Finance Department
City of San Marcos
Annual Comprehensive Financial Report
For the Year Ended June 30, 2021
TABLE OF CONTENTS
INTRODUCTORY SECTION:
Letter of Transmittal ....................................................................................................... ......... i Organizational Chart ........................................................................................................ ..... vii List of Principal Officials ................................................................................................. ...... viii GFOA Certificate of Achievement for Excellence in Financial Reporting .............................. ix
FINANCIAL SECTION:
Independent Auditor's Report ................................................................................................ 1 Management's Discussion and Analysis ................................................................................ 4 Basic Financial Statements:
Government-Wide Financial Statements:
Statement of Net Position ......................................................................................... 16 Statement of Activities .............................................................................................. 17 Fund Financial Statements:
Balance Sheet – Governmental Funds .................................................................... 19 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position ................................................................................... 20 Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds .......................................................................................... 21 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities .............. 22 Statement of Net Position – Proprietary Funds ........................................................ 23 Statement of Revenues, Expenses and Changes in Fund Net Position - Proprietary Funds ............................................................................................... 24 Statement of Cash Flows – Proprietary Funds ......................................................... 25 Statement of Fiduciary Net Position – Fiduciary Funds ........................................... 26 Statement of Changes in Fiduciary Net Position – Fiduciary Funds ........................ 27 Index to Notes to Basic Financial Statements ................................................................ 28
Required Supplementary Information:
Schedule of Changes in Net Pension Liability and Related Ratios ................................ 93 Schedule of Plan Contributions – Agent Plan ................................................................ 95 Schedule of City’s Proportionate Share of the Plan’s Net Pension Liability and Related Ratios as of the Measurement Date .................................................... 96 Schedule of Plan Contributions – Cost-Sharing Plan ..................................................... 97 Schedule of Changes in Net OPEB Liability and Related Ratios as of the Measurement Date .................................................................................... 98
City of San Marcos
Annual Comprehensive Financial Report
For the Year Ended June 30, 2021
TABLE OF CONTENTS, (Continued)
FINANCIAL SECTION, (Continued):
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget to Actual:
General Fund ..................................................................................................... 99 San Marcos Affordable Housing Fund .............................................................. 100 Notes to Required Supplementary Information ............................................................ 101 Supplementary Schedules:
Non-Major Governmental Funds:
Combining Balance Sheet ...................................................................................... 105 Combining Statement of Revenues, Expenditures and Changes in Fund Balances ................................................................................................. 106 Non-Major Special Revenue Funds:
Combining Balance Sheet ...................................................................................... 107 Combining Statement of Revenues, Expenditures and Changes in Fund Balances ................................................................................................. 109 Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual:
Gas Tax Special Revenue Fund ...................................................................... 111 Traffic Safety Special Revenue Fund ............................................................... 112 Community Facilities District 98-02 Special Revenue Fund ............................. 113 Street Lighting District Special Revenue Fund ................................................. 114 Senior Nutrition Grant Special Revenue Fund ................................................. 115 Community Development Block Grant Special Revenue Fund ........................ 116 Center Drive Maintenance Special Revenue Fund .......................................... 117 Art in Public Places Special Revenue Fund ..................................................... 118 Public, Education and Government Special Revenue Fund ............................. 119 Congestion Management CFD Special Revenue Fund .................................... 120 CalHOME Grant Special Revenue Fund .......................................................... 121 CASp Fee Special Revenue Fund ................................................................... 122 Gas Tax RMRA Special Revenue Fund ........................................................... 123 Non-Major Debt Service Funds:
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual:
San Marcos Public Facilities Authority Debt Service Fund ......................... 124 Non-Major Capital Projects Funds:
Combining Balance Sheet ...................................................................................... 125 Combining Statement of Revenues, Expenditures and Changes in Fund Balances ................................................................................................. 127 Fiduciary Funds:
Combining Statement of Custodial Net Position .................................................... 129 Combining Statement of Changes in Custodial Net Position ................................. 130
City of San Marcos
Annual Comprehensive Financial Report
For the Year Ended June 30, 2021
TABLE OF CONTENTS, (Continued)
STATISTICAL SECTION (UNAUDITED):
Net Position by Component ............................................................................................... 132 Changes in Net Position ..................................................................................................... 134 Fund Balances of Governmental Funds ............................................................................. 138 Changes in Fund Balances of Governmental Funds ......................................................... 140 Assessed Value and Estimated Actual Value of Taxable Property .................................... 142 Direct and Overlapping Property Tax Rates ...................................................................... 143 Property Tax Levies and Collections .................................................................................. 144 Ratios of Outstanding Debt by Type .................................................................................. 145 Ratios of General Bonded Debt Outstanding ..................................................................... 146 Legal Debt Margin Information ........................................................................................... 147 Pledged-Revenue Coverage .............................................................................................. 149 Direct and Overlapping Debt .............................................................................................. 15 0 Demographic and Economic Statistics ............................................................................... 151 Principal Employers ......................................................................................................... .. 152 Full-Time and Part-Time City Employees by Function ....................................................... 153 Operating Indicators by Function ....................................................................................... 154 Capital Asset Statistics by Function/Program .................................................................... 156
Transmittal Letter………………………………………………………….
December 23, 2021
Members of the Council and Citizens of San Marcos:
It is our pleasure to present the City of San Marcos (City) fiscal year 2020- 21 Annual Comprehensive Financial Report (A CFR). This report has been prepared in conformity with generally accepted accounting principles (GAAP) and has been audited in accordance with generally accepted auditing standards by Rogers, Anderson, Malody & Scott, LLP, a firm of licensed certified public accountants.
The goal of the independent audit was to provide reasonable assurance that the financial statements of the Cit y are free of material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, if any, and evaluating the overall financial statement presentation. The auditors concluded that there was a reasonable basis for rendering an unmodified (clean) opinion. The independent auditors’ report is presented as the first component of the financial section of this report.
The ACFR consists of management’s representations concerning the finances of the City. Consequently, management assumes full responsibility for the completeness and reliability of all of the information presented in this report. To provide a reasonable basis for making these representations, management has established a comprehensive internal control framework that is designed both to protect the City’s assets from loss, theft, or misuse and to compile sufficient reliable i nformation for the preparation of the financial statements in conformity with GAAP. Because the cost of internal controls should not outweigh their benefits, the City’s comprehensive framework of internal controls has been designed to provide reasonable r ather than absolute assurance that the financial statements will be free from material misstatements. Management asserts that, to the best of our knowledge and belief, this report is complete and reliable in all material respects.
GAAP requires that a narrative introduction, overview, and analysis be provided along with the financial statements in the form of Management’s Discussion and Analysis (MD&A). The City’s MD&A can be found immediately following the report of the independent auditors. This letter of transmittal is designed to complement the MD&A and should be read in conjunction.
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CITY OF SAN MARCOS PROFILE
The City was incorporated in 1963 and chartered on July 4, 1994. According to historical legends, the Spaniards, while pursuing the Native Americans in the late 18 th century, came upon a fertile valley, which was named Los Vallecitos de San Marcos (Little Valleys of Saint Mark). Toda y, often nicknamed still as “Valley of Discovery”, the City offers rugged beautiful rolling hills, bust ling commercial districts, and leading educational institutions.
The City is located approximately twenty -four miles north of downtown San Diego and ninety miles south of Los Angeles, in the northern coastal/inland region of San Diego County (County). The Cerros Las Posas, Merriam and San Marcos foothills and a series of valleys are the chief topographic features.
The City is accessible to San Diego, Orange, Imperial, San Bernardino, Riverside and Los Angeles counties. It is situated along the State Hig hway 78 corridor (78 Corridor) and is bordered by Escondido to the east, Vista to the north and west, Carlsbad to the south and west and unincorporated areas of the San Diego County to the north and south. The City’s sphere of influence covers approximatel y thirty- three square miles.
The City continues to be the smallest yet fastest growing population along the 78 Corridor with a n estimated population of 96,302 as reported by the Department of Finance . The City’s population has grown an average of 1.3% a year since 2012. The City continues to have the largest amount of available residential land in North County with a median household income of $78,797, one of the highest along the 78 corridor.
The City delivers a full range of municipal services under the Council-Manager form of government, and offers an outstanding quality of life for its residents. Public facilities include an expanding citywide trail system, a variety of parks, recreational facilities and a County library. The City provides a diverse array of services for seniors and youth, extensive continuing educational programs, concerts, team sports, and special events.
City Council:
The City Council is comprised of five council members for a term of four ye ars, on a staggered basis .
The Mayor is directly elected, at large, for a four-year term. The City Council appoints the City Manager and the City Attorney. The City Council, the C ity’s chief policy -making body, enacts laws know n as ordinances, sets policies know n as resolutions and adopts an annual Operations and C apital Improvement Program budget. The City Council also oversees a variety of advisory commissions, such
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as the Traffic Commission and Planning Commission, to address specific issues. These advisory commission members are appointed by the City Council.
ECONOMIC CONDITIONS AND OUTLOOK
Education & Employment:
The City is home to several academic institutions with the second highest educational attainment among the five 78 corridor cities. The City is home to the San Marcos Unified School District (SMUSD ), which has achieved local and state recognition for excellence . A number of higher education institutions, including California State University San Marcos and Palomar College , also have established campuses in the City. The continued growth of these academic institutions contributes to the creation, support and susta inability of a professional workforce within the City.
The City is h ome to a diverse and well -balanced base of employers including wholesale trade, retail trade, food services, healthcare and manufacturing. Prior to the COVID -19 global pandemic, the City was the home of approximately 46,259 jobs, over 4,330 businesses with an unemployment rate below 3%. In March 2020, m any employers were forced to shut down to mitigate the spread of the virus and by May 2020 the unemployment rate increased to almost 30% at its peak . While staffing and supply chain issues continue to affect local business, the unemployment rate has continued to drop reaching approximately 6% in July 2021. According to EMSI, annual employme nt in San Marcos was 43,288 in 2020 and projected to remain flat in 2021 and 2022.
Real Estate Market:
Real estate values in the City have seen an average annual appreciation of 26.2% since 2000 with median home prices reported at $927,250 in 2021, well above the County median of $749,750. The City continues to have potential for new development in the future and continues to see a steady stream of housing stock construction at a stable rate compared to other cities throughout the region .
Local Trends:
The City continues to c reate interest in infill development opportunities with new commercial, residential and mixed-use development projects to produce additional revenue streams. However, the COVID-19 global pandemic has significantly affected many of the retailers, manufacturers and food service providers that call San Marcos home . The City continues to support businesses through the COVID-19 global pandemic as they navigate operations under State and County orders. In response to social distancing requirements, the City has temporarily changed the rules regarding outdoor uses and
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is now allowing restaurants, retail and other activ ities in parking lots, as well as sidewalk patios , as allowed by State and County health or ders.
Property tax revenue remains stable and unaffected by current conditions. The San Diego County Assessor’s Office has estimated a preliminary property assessment roll value reflecting a 4.9% increase to the City’s 2020-21 assessed value.
Sales tax revenue decreased, by approximately 1 0%, in 202 1 compared to 20 20 receipts. There is an optimistic expectation that 2021 sales tax revenue will not decrease further and may produce a minimal increase compared to 2020.
Capital & Infrastructure Improvements:
As North San Diego County continues to grow the challenges of increased traffic and congestion, affordable housing, and demand for services intensifies. The City Council continues to balance these competing priorities within the framework of their strategic themes of dynamic and responsive service delivery, economic development, good governance, quality of life, and planning for the future through the Capital Improvement Program (CIP) .
The CIP budget reflects the City’s foreseeable needs over the next five years and is developed in accordance wit h the City Council adopted policies and priorities in mind. The p roposed FY 20 21-22 through FY 2025-26 CIP budget appropriation was $6.7 million. The majority of the total CIP budget is in the “Creek District” projects, which are intended to mitigate traffic congestion, provide recreational opportunities and additional services for the community.
The City Council’s adoption of the Fiscal Management Policy provides for a general fund contribution to the City’s Infrastructure, City Facility, and City Vehicles and Equipment funds to plan for the rehabilitation and replacement of City infrastructure . Due to the economic conditions imposed by the COVID-19 global pandemic, an appropriation for use in the FY 20 21-22 Operating and CIP Budg et has not been budgeted.
Long Range Financial Forecast:
A five-year general fund financial forecast (Forecast) is developed as part of the budgeting process, which serves to guide the long -range fiscal planning, and budget develop ment process. The Forecast details the City’s major revenue and expenditure items to provide long-term trend analysis and projections.
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Projected revenue is not sufficient to cover budgeted expenditures at this time. T he City Council adopted FY 2021-22 Operating budget with expenditures of approximately $80.3 million, an increase of $4.7 million from the prior year adopted budget. The decrease in revenues are attributed to the economic turbulence following the COVID-19 global pandemic. As a result, the recommended FY 2021- 22 operating budget was adopted with the assumption that by fiscal year end, a projected deficit of $2.56 million dollars may need to be resolved through the use of reserve funds . However, the Federal American Rescue Plan Act provides for “ Revenue Replacement Funding ” which will offset some of the long-term revenue loss the City faced as a result of the pande mic.
Current economic indicators and revenue forecasts reflect a slightly positive outlook over the next five years compared to prior year. Still, the City is expected to experience increases in general fund expenditure in those same years that may outpace the revenue increases, in spite of efforts to diligently reduce expenses. The City continues to proactively take steps to mitigate increased costs by increasing employee contributions to the CalPERS retirement plan & capping the City’s share of employee healthcare expenses. Even with these adjustmen ts, it continues to be necessary for the City and its collective bargaining groups, through negotiations, to work collaboratively toward solutions to help relieve the City’s growing pension burden in the coming years.
As the global and local economies emerge from the pandemic , we may continue to see unanticipated and unknown long term effects on future supply chains, expenditures and revenues. However, the mild but continued increase in sales tax, rental and charges for services is forecasted to alleviate the challenges we faced in prior years.
The City is committed to maintaining the General Fund Reserve Policy, which requires unassigned fund balance ( liquid, s pendable assets) to be divided into three categories designated as the Catastrophic/Emergency Reserve, One -time Recurring Savings/Opportunity Reserve and Econom ic Contingency/Pension Stabilization Reserve. At year-end, the unassigned general fund balance shall be maintained at a minimum of forty-percent of the annual operating expenditures . This figure is then allocated between the Catastrophic/Emergency Reserve (33.3 percent), One -time Recurring Savings/Opportunity Reserve (3 3.3 percent), and Economic Contingency/Pension Stabilization Reserve (33.3 percent). The General Fund Reserve Policy is reviewed annually by the City Council as part of the annual operating budget review and adoption process. Should the projected deficit require the use of reserve funds, the City Council will review the allocation and any changes to the minimum reserve requirement prior to any action taken.
The City continues to focus on the City Council strategic goals such as, comprehensive planning and action in land use and transportation, infrastructure funding , economic development and the development of fiscal policies to provide financial resilience & prosperity, especially in unprecedented times.
SIGNIFICANT EVENTS AND ACCOMPLISHMENTS
Awards and Recognitions:
The City is dedicated to meeting the social , recreational , educational, cultural , commercial and retail needs of the community . The City's efforts to continually meet the needs of its citizens have resulted in a variety of awards and recognitions , as follows:
• The City received an award from the Government Finance Officers Association (GFOA) for "excellence in financial reporting " for the FY 2019-20 ACFR. • The City of San Marcos Fire Department earned a Class l Insurance Services Office (ISO) rating, which represents superior prope rty fire protection.
• The City of San Marcos Fire Department was recognized by Palomar Health for our partnership and leadership during Operation Collaboration
• The City was selected as an International Economic Development Council Excellence (IEDC) in Economic Development Silver Award recipient for the " North City: A new downtown for San Marcos" Public-Private Partne rship efforts .
Acknowledgments:
Management wishes to express appreciat ion to staff for their dedication and contribution throughout the year and assistance with the preparation of the ACFR.
Special acknowledgement must be given to the City Council for their dedication to directing the City's financial in a responsible , professional and progressive manner.
Respectfully submitted ,
( ~
Finance Director
City of San Marcos I 1 Civic Cent er Drive I San Marcos , CA 92069 I (760) 744-10 50 I www.san-marcos.net
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City of San Marcos
Organizational Chart
June 30, 2021
SAN MARCOS VOTERS
CITY COUNCIL
CITY MANAGER
City Attorney
Fire
Human Resources &
Risk Management
Law
Enforcement
Information
Technology
Economic Development/
Housing &
Neighborhood Services
Finance
City Clerk
Development
Services
Parks & Recreation
Public Works
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City of San Marcos
List of Principal Officials
June 30, 2021
City Council
Mayor Rebecca Jones
Mayor Pro Tem Sharon Jenkins
Council Member Ed Musgrove
Council Member Maria Nunez
Council Member Randy Walton
Administration
City Manager/Treasurer Jack Griffin
Deputy City Manager Michelle Bender
City Attorney Helen Holmes Peak
City Clerk Phillip Scollick
Department/Division Heads
Development Services Director Dahvia Lynch
Economic Development Director Tess Sangster
Finance Director Lisa Fowler
Fire Chief Daniel Barron
Human Resources, Risk & IT Director Michelle Bender
Parks and Recreation Director Buck Martin
Public Works Director Darren Chamow
Sheriff Station Captain Jason Vickery
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Independent Auditor's Report
The Honorable City Council
of the City of San Marcos
San Marcos, California
Report on the Audit of the Financial Statements
Opinions
We have audited the accompanying fi nancial statements of the governmental activities, the business-type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of the City of San Marcos (the City), as of and for the year ended June 30, 2021, and the related notes to the financial statements, which collectively comprise the City's basic financial statements as listed in the table of contents.
In our opinion, the accompanying financial statements present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of the City, as of June 30, 2021, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of Amer ica (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further descri bed in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
Responsibilities of Management for the Financial Statements
The City’s management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of Amer ica, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
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In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise subst antial doubt about the City’s ability to continue as a going concern for twelve months beyond the financia l statement date, including any currently known information that may raise substantial doubt shortly thereafter.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or t he override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with GAAS, we:
Exercise professional judgment and maintain professional skepticism throughout the audit. Identify and assess the risks of material misstat ement of the financial statements, whether due to fraud or error, and design and perform audit proce dures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumst ances, but not for the purpose of expressing an opinion on the effectiveness of the City’s intern al control. Accordingly, no such opinion is expressed.
Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
Conclude whether, in our judgment, there are condi tions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for a reasonable period of time.
We are required to communicate with those char ged with governance regarding, among other matters, the planned scope and timing of the audit, significant audi t findings, and certain internal control–related matters that we identified during the audit.
Emphasis of Matter
As discussed in Note 1 to the financial statement s, the City adopted provisions of Governmental Accounting Standards Board Statement No. 84, Fiduciary Activities . Our opinion is not modified with respect to this matter.
Required Supplementary Information
Accounting principles generally accepted in the Un ited States of America r equire that the required supplementary information, as listed in the table of contents be presented to supplement the basic financial statements.
Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for plac ing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of mana gement about the methods of preparing the information and comparing the information for consistency with m anagement’s responses to our inquiries, the basic
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financial statements, and other knowledge we obtained during our audit of the basic financial statements.
We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
Supplementary Information
Our audit was conducted for the purpose of forming opi nions on the financial statements that collectively comprise the City’s basic financial statements. The su pplementary information as listed in the table of contents is presented for purposes of additional analysis and are not a required part of the basic financial statements.
The accompanying supplementary information is t he responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional pr ocedures, including comparing and reconciling such information directly to the underlying accounting a nd other records used to pr epare the basic financial statements or to the basic financial statements themselves, and other addi tional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the supplementary information is fairly stated, in all material respects, in relation to the basic financial statements as a whole.
Other Information included in the Annual Report
Management is responsible for the other information included in the annual report. The other information comprises the introductory and statistical sections but does not include the financial statements and our auditor's report thereon. Our opinions on the financia l statements do not cover t he other information, and we do not express an opinion or any form of assurance thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information a nd the financial statements, or the other information otherwise appears to be materially misstated. If, bas ed on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated December 23, 2021 on our consideration of the City’s internal cont rol over financial reporting and on our tests of its compliance with certain provisions of laws, re gulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of internal control over financial reporting or on compliance.
That report is an integral part of
an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance.
San Bernardino, California
December 23, 2021
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City of San Marcos
Management’s Discussion and Analysis
For the Year Ended June 30, 2021
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The management of the City of San Marcos (the City) offers readers of the City's financial statements this narrative overview and analysis of the financial activities for the fiscal year ended June 30, 2021. Readers are encouraged to consider the information presented here in conjunction with additional information that is furnished in the letter of transmittal, which can be found beginning on page i of this report.
FINANCIAL HIGHLIGHTS
• The assets and deferred outflows of resources of the City exceeded its liabilities and deferred inflows of resources at the close of the most recent fiscal year by $1,018,105,328 (net position). Of this amount, $133,082,548 represents unrestricted net position, which represents the majority of investments in real estate and joint venture.
• The City’s total net position increased $16,220,674 from the prior fiscal year mainly attributable to regular current year operating activities along with an increase in capital contributions and grants related to federal COVID relief.
• At the close of the current fiscal year, the City’s governmental funds reported combined fund balances of $215,194,096, an increase of $2,339,704 in comparison with the prior year. Approximately 13.3% of this amount or $28,684,032 is available for spending at the government's discretion (unassigned fund balance).
• At the end of the current fiscal year, unrestricted fund balance (the total of the committed, assigned, and unassigned components of fund balance) for the General Fund was $51,933,708, or approximately 62.78% of total General Fund expenditures.
OVERVIEW OF THE ANNUAL COMPREHENSIVE FINANCIAL REPORT (ACFR)
The discussion and analysis provided here is intended to serve as an introduction to the City of San Marcos' basic financial statements. The City’s basic financial statements consist of three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to basic financial statements. This report also includes supplementary information intended to furnish additional detail to support the basic financial statements themselves.
Government-Wide Financial Statements . The government-wide financial statements are designed to provide readers with a broad overview of the City’s finances, in a manner similar to a private-sector business.
City of San Marcos
Management’s Discussion and Analysis
For the Year Ended June 30, 2021
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The statement of net position presents financial information on all of the City’s assets, liabilities, and deferred inflows/outflows of resources, 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, revenues and expenses are reported for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave).
Both of the government-wide financial statements mentioned above distinguish functions of the City that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the City include general government, community dev elopment, public safety, highways, streets, and parks, and culture and recreation. The business-type activities of the City include Creekside Marketplace.
The government-wide financial statements include not only the City itself (known as the primary government), but also the following component units: the San Marcos Community Foundation (Foundation), the San Marcos Public Facilities Authority (Facilities Authority), the California Mobile Home Financing Authority (CAMPFA), and the San Marcos Public Financing Authority (Financing Authority), for which the City is financially accountable. The Foundation, Facilities Authority, CAMPFA, and the Financing Authority, although also legally separate, functions for all practical purposes as a department of the City, and therefore have been included as an integral part of the primary government.
The government-wide financial statements can be found on pages 16-18 of this report.
Fund Financial Statements . A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the City can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds.
Governmental Funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements.
However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in assessing a governments near-term financing requirements.
City of San Marcos
Management’s Discussion and Analysis
For the Year Ended June 30, 2021
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Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements.
By doing so, readers may better understand the long-term impact of the City’s near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities.
The City maintains twenty-three individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the General Fund, the San Marcos Affordable Housing Fund, and the Capital Impr ovements Fund, which are considered to be major funds. Data from the other twenty governmental funds are combined into a single aggregated presentation. Individual fund data for each of these non-major governmental funds is provided in the form of combining statements in the combining and individual fund statements and schedules section of this report.
The City adopts an annual appropriated budget for its General Fund. A budgetary comparison schedule has been provided for the General Fund to demonstrate compliance with this budget, as noted in the table of contents.
The basic governmental fund financial statements can be found on pages 19-22 of this report.
Proprietary Funds. The City maintains one type of proprietary fund. Enterprise funds are used to report the same functions presented as busi ness-type activities in the government-wide financial statements. The City uses enterprise funds to account for the activity of Creekside Marketplace, a City-owned shopping center and other non-municipal use leased space.
Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund financial statements provide information for these business-type activities, which is considered to be a major fund of the City.
The basic proprietary fund financial statements can be found on pages 23-25 of this report.
Fiduciary Funds . Fiduciary funds are used to account for resources held for the benefit of parties outside of the government. Fiduciary funds are not reported in the government-wide financial statements because the resources of those funds are not available to support the City’s own programs. The accounting used for fiduciary f unds is much like that used for proprietary funds.
City of San Marcos
Management’s Discussion and Analysis
For the Year Ended June 30, 2021
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The City maintains two different types of fiduciary funds. The Custodial Funds account for funds held in trust for specific purposes and the Private-Purpose Trust Fund account for the City of San Marcos Successor Agency.
The fiduciary fund financial statements can be found on pages 26-27 of this report.
Notes to Basic Financial Statements . The notes provide additional information that is necessary to acquire a full understanding of the data provided in the government-wide and fund financial statements. The notes to basic financial statements can be found on pages 30-92 of this report.
Other Information. In addition to the basic financial statements and accompanying notes, this report also presents required supplementary information concerning the City’s schedule of changes in the net pension liability and related ratios (miscellaneous employees), schedule of City’s proportionate share of the net pension liability and related ratios as of the measurement date (safety employees), schedules of plan contributions (both miscellaneous and safety employees), schedule of changes in the net OPEB liability and related ratios, and general fund and major special revenue funds’ budgetary schedules.
Required supplementary information can be found on pages 93-101 of this report.
The combining statements referred to earlier in connection with non-major governmental funds are presented immediately following the required supplementary information. Combining and individual fund statements and schedules can be found on pages 105-130 of this report.
GOVERNMENT-WIDE OVERALL FINANCIAL ANALYSIS
As noted earlier, net position over time, may serve as a useful indicator of a government’s financial position. In the case of the City, assets and deferred outflows of resources exceeded liabilities by $1,018,105,328, at the close of the most recent fiscal year.
City of San Marcos
Management’s Discussion and Analysis
For the Year Ended June 30, 2021
-8-
City of San Marcos' Net Position
2021 2020 2021 2020 2021 2020
Current and other assets 433,617,956$ 413,168,117 $ 97,507,901 $ 97,806,045 $ 531,125,857 $ 510,974,162 $ Capital assets, net 596,561,459 586,689,259 - - 596,561,459 586,689,259 Total assets 1,030,179,415 999,857,376 97,507,901 97,806,045 1,127,687,316 1,097,663,421 Deferred outflows
of resources 17,241,101 13,255,642 - - 17,241,101 13,255,642 Non-current liabilities 90,151,448 83,148,149 - - 90,151,448 83,148,149 Other liabilities 33,747,859 21,228,205 360,088 904,390 34,107,947 22,132,595 Total Liabilities 123,899,307 104,376,354 360,088 904,390 124,259,395 105,280,744 Deferred inflows
of resources 2,563,694 3,753,665 - - 2,563,694 3,753,665 Net position
Net investment in
capital assets 591,038,322 580,646,055 - - 591,038,322 580,646,055 Restricted 293,984,458 282,346,575 - - 293,984,458 282,346,575 Unrestricted 35,934,735 41,990,369 97,147,813 96,901,655 133,082,548 138,892,024 Total net position 920,957,515$ 904,982,999 $ 97,147,813 $ 96,901,655 $ 1,018,105,328$ 1,001,884,654 $ Total
Business-Type
Activities
Governmental
Activities
By far, the largest portion of the City’s net position (58.1%) reflects its investment in capital assets (e.g., land, buildings, furniture and infrastructure), less any related outstanding debt that was used to acquire those assets. The City uses these capital assets to provide a variety of services to its citizens. Accordingly, these assets are not available for future spending. Although the City’s investment in capital assets is reported net of related debt, it should be noted that the resources used to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities.
An additional portion of the City’s net position (28.9%) represents resources that are subject to external restrictions on how they may be used. The remaining balance of $133,082,548 is unrestricted, however, that amount represents the majority of investments in real estate and joint venture.
At the end of the current fiscal year, the City is able to report positive balances for both the government as a whole, as well as for its separate governmental and business-type activities.
The same situation held true for the prior fiscal year.
The City’s overall net position increased $16,220,674 from the prior fiscal year. The reasons for this overall increase are discussed in the following sections for governmental activities and business-type activities.
City of San Marcos
Management’s Discussion and Analysis
For the Year Ended June 30, 2021
-9-
Governmental Activities. During the current fiscal year, net position for governmental activities increased $15,974,516 from the prior fiscal year for an ending balance of $920,957,515. The increase in the overall net position of governmental activities is the result of regular current year operating activities along with an increase in capital contributions and grants related to federal COVID relief.
City of San Marcos’ Changes in Net Position
2021 2020 2021 2020 2021 2020
Revenues
Program revenues:
Charges for services 28,018,162 $ 26,115,996 $ 4,617,947 $ 4,808,776 $ 32,636,109 $ 30,924,772 $ Operating contributions and
grants 24,626,457 23,979,367 - - 24,626,457 23,979,367 Capital contributions and grants 22,305,574 7,053,470 - - 22,305,574 7,053,470 General revenues:
Property taxes 24,980,971 24,982,707 - - 24,980,971 24,982,707 Transient occupancy taxes 871,393 1,068,175 - - 871,393 1,068,175 Business license tax 230,340 226,950 - - 230,340 226,950 Motor vehicle license 72,985 79,818 - - 72,985 79,818 Franchise fees 4,220,898 4,282,862 - - 4,220,898 4,282,862 Rental income 7,290,221 5,140,403 - - 7,290,221 5,140,403 Sales taxes shared state
revenue, unrestricted 17,308,573 19,295,396 - - 17,308,573 19,295,396 In lieu sales tax, unrestricted - 11,603 - - - 11,603 Investment income, restricted 109,624 4,845,812 - - 109,624 4,845,812 Investment income, unrestricted 1,921,787 5,457,297 2,483 1,636,309 1,924,270 7,093,606 Gain (loss) on disposal of
capital assets (74,079) (7,493,398) - - (74,079) (7,493,398) Miscellaneous 1,026,771 880,218 - 1,802 1,026,771 882,020 Total Revenues 132,909,677 115,926,676 4,620,430 6,446,887 137,530,107 122,373,563 Expenses
General government 24,133,604 26,620,938 - - 24,133,604 26,620,938 Community development 13,174,383 10,633,598 - - 13,174,383 10,633,598 Public safety 45,837,054 42,461,674 - - 45,837,054 42,461,674 Highways, streets and parks 33,373,256 32,330,771 - - 33,373,256 32,330,771 Culture and recreation 3,557,335 3,980,068 - - 3,557,335 3,980,068 Interest on long-term debt 259,529 227,552 - - 259,529 227,552 Creekside Marketplace - - 974,272 1,339,226 974,272 1,339,226 Total Expenses 120,335,161 116,254,601 974,272 1,339,226 121,309,433 117,593,827 Increase in Net Position
Before Transfers 12,574,516 (327,925) 3,646,158 5,107,661 16,220,674 4,779,736 Transfers 3,400,000 3,500,000 (3,400,000) (3,500,000) - - Change in Net Position 15,974,516 3,172,075 246,158 1,607,661 16,220,674 4,779,736 Net Position, Beginning, as Restated 904,982,999 901,810,924 96,901,655 95,293,994 1,001,884,654 997,104,918 Net Position, Ending 920,957,515 $ 904,982,999 $ 97,147,813 $ 96,901,655 $ 1,018,105,328$ 1,001,884,654 $ Total
Governmental
Activities
Business-Type
Activities
City of San Marcos
Management’s Discussion and Analysis
For the Year Ended June 30, 2021
-10-
Increase
(Decrease) Percent
Percent From Increase
Revenue Source 2021 of Total 2020 (Decrease)
Charges for services 28,018,162 $ 20.6% 1,902,166 $ 6.8% Operating contributions and grants 24,626,457 18.1% 647,090 2.6% Capital contributions and grants 22,305,574 16.4% 15,252,104 68.4% Property taxes 24,980,971 18.3% (1,736) 0.0% Franchise fees 4,220,898 3.1% (61,964) -1.5% Sales taxes shared state revenue 17,308,573 12.7% (1,986,823) -11.5% In lieu sales tax - 0.0% (11,603) 100.0% Rental income 7,290,221 5.3% 2,149,818 29.5% Other general revenue and transfers 7,558,821 5.5% (1,006,051) -13.3% Total revenue 136,309,677 $ 100.0% 16,883,001 $ 12.4% Charges for
Services, 20.6%
Operating
Contributions and
Grants, 18.1%
Capital
Contributions and
Grants, 16.4%
Property Taxes,
18.3%
Franchise Fees,
3.1%
Sales taxes shared
state revenue,
12.7%
In lieu sales tax,
0.0%
Rental income,
5.3% Other General
Revenue and
Transfers, 5.5%
GOVERNMENTAL ACTIVITIES
Revenue by Source
Fiscal Year 2020-21
City of San Marcos
Management’s Discussion and Analysis
For the Year Ended June 30, 2021
-11-
Increase
(Decrease) Percent
Percent From Increase
Function 2021 of Total 2020 (Decrease)
General government 24,133,604 $ 20.1% (2,487,334) $ -10.3% Community development 13,174,383 10.9% 2,540,785 19.3% Public safety 45,837,054 38.1% 3,375,380 7.4% Highways, streets and parks 33,373,256 27.7% 1,042,485 3.1% Culture and recreation 3,557,335 3.0% (422,733) -11.9% Interest on long-term debt 259,529 0.2% 31,977 12.3% Total expenses 120,335,161 $ 100.0% 4,080,560 $ 3.4% General
Government,
20.1%
Community
Development,
10.9%
Public Safety,
38.1%
Highways, Streets
and Parks, 27.7%
Culture and
Recreation, 3.0%
Interest on Long-
Term Debt, 0.2%
GOVERNMENTAL ACTIVITIES
Expenses by Function
Fiscal Year 2020-21
Business-type Activities. For the City’s business-type activities, the results for the current fiscal year were positive. Overall net position increased to an ending balance of $97,147,813.
The Creekside Marketplace Enterprise Fund accounts for the activity of a City-owned shopping center. The total increase in net position for business-type activities was $246,158 or 0.3% from the prior fiscal year. This is mostly due to decrease in Creekside Marketplace expenses.
City of San Marcos
Management’s Discussion and Analysis
For the Year Ended June 30, 2021
-12-
FINANCIAL ANALYSIS OF GOVERNMENTAL FUNDS
As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements.
Governmental Funds. The focus of the City of San Marcos’ governmental funds is to provide information 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 may serve as a useful measure of a government's net resources available for discretionary use as they represent the portion of fund balance which has not yet been limited to use for a particular purpose by either an external party, the City itself, or a group or individual that has been delegated authority to assign resources for use for particular purposes by the City’s Council.
At June 30, 2021, the City’s governmental funds reported combined fund balances of $215,194,096, an increase of $2,339,704 in comparison to the prior year. Approximately 13.3% or $28,684,032 of this amount constitutes an unassigned fund balance, which is available for spending at the government's discretion. The remainder of the fund balance is either non- spendable, restricted, or assigned to indicate that it is 1) not in spendable form ($61,913,706), 2) restricted for particular purposes ($112,731,728), or 3) assigned for particular purposes ($11,864,630).
Intergovernmental revenues for the year increased 68.1% primarily due to increase in COVID relief related grants in the amount of $10,339,825.
Rental income increased $2,149,818 or 29.5% primarily due to increase in number of tenants.
Capital outlay expenditures increased by $14,308,079 or 84.5% mostly due to beginning construction of the San Marcos Creek Specific Plan project.
Major Funds
The General Fund is the chief operating fund of the City. At the end of the current fiscal year, unassigned fund balance of the General Fund was $40,069,078, while the total fund balance increased by $9,339,752 or 8.7% to $116,736,764. As a measure of the General Fund's liquidity, it may be useful to compare both unassigned fund balance and total fund balance to total General Fund expenditures. Unassigned fund balance represents approximately 48.4% of total General Fund expenditures, while total fund balance represents approximately 141.1% of that same amount.
The San Marcos Affordable Housing Special Revenue Fund accounts for funds intended to improve or preserve the community’s supply of affordable housing. This Fund ended the year with a fund balance of $40,945,345. To assist with the construction of affordable housing projects, $5,314,275 was loaned to housing developers during the fiscal year. Overall, developer loan activity was up from the prior year.
City of San Marcos
Management’s Discussion and Analysis
For the Year Ended June 30, 2021
-13-
The Capital Improvement Capital Projects Fund accounts for capital projects funded with Federal and other grants and developer contributions. This fund ended the year with a deficit fund balance of ($11,103,204).
GENERAL FUND BUDGETARY HIGHLIGHTS
The General Fund, as presented in the ACFR and for purposes of financial reporting in conformity with generally accepted accounting pr inciples (GAAP), is comprised of four funds including the General Operating Fund, and the Infrastructure Replacement/Rehabilitation Fund, Facilities Replacement/Rehabilitation Fund, and the Vehicle & Equipment Acquisition/ Replacement Fund (Rehabilitation and Replacement Funds). However, in the City’s approved budget document, these funds are separately presented.
During the year, amendments to the original budgeted appropriations were authorized by the City Council and minor amendments to rea llocate appropriations among departments took place. The movement of the appropriations between departments was not significant and did not increase the overall operating budget. Due to the COVID-19 global pandemic, the City’s major revenue sources were negatively impacted and the City Council adopted the FY 2020-21 budget at a deficit. To address the deficit, the operating expenditure budget was decreased by $1,628,931 and one-time General Fund revenues was used to reduce the budget deficit to $252,285 for FY 2020-21 inclusive of the General Fund and the Rehabilitation and Replacement Funds. At the time of approval of the mid-year budget adjustments there was no indication of any significant improvements to the revenue crisis imposed by COVID-19.
While the FY2020-21 General Fund Budget was revised and balanced without the use of General Fund reserves, any additional one-time revenue or operating surplus were not available to appropriate per the City’s Fiscal Management Policy.
CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets. The City’s investment in capital assets for its governmental and business-type activities as of June 30, 2021, amounts to $596,561,459 (net of accumulated depreciation). This investment in capital assets includes land, land improvements, buildings, furniture and equipment, and infrastructure. The total increase in capital assets for the current fiscal year was $9,872,200 or approximately 1.7% due to an increase in construction in progress offset by capital asset dispositions and depreciations.
City of San Marcos
Management’s Discussion and Analysis
For the Year Ended June 30, 2021
-14-
City of San Marcos’ Capital Assets
(Net of accumulated depreciation)
2021 2020 2021 2020 2021 2020
Land and Improvements 304,872,384$ 307,006,019 $ - $ - $ 304,872,384$ 307,006,019 $ Buildings 38,889,801 40,354,932 - - 38,889,801 40,354,932 Furniture and Equipment 7,300,733 6,808,289 - - 7,300,733 6,808,289 Infrastructure 177,696,225 188,143,043 - - 177,696,225 188,143,043 Construction in progress 67,802,316 44,376,976 - - 67,802,316 44,376,976 Total 596,561,459$ 586,689,259 $ - $ - $ 596,561,459$ 586,689,259 $ Activities Activities Total
Governmental Business-Type
The progress and completion of several capital asset & infrastructure improvements during the fiscal year including beginning construction of the San Marcos Creek Specific Plan project.
Additional information on the City’s capital assets can be found in Note 7 on pages 53-54 of this report.
Non-Current Liabilities. At the end of the current fiscal year, the City had total non-current outstanding liabilities of $90,151,448. Of this amount, $2,585,000 is debt backed by the full faith and credit of the government. The remainder of the City’s long-term obligations comprises pension-related debt, OPEB debt, note and loans payables, worker’s compensation claims, compensated absences, and capital leases.
City of San Marcos’ Non-Current Outstanding Liabilities
2021 2020 Net Change
Compensated absences 4,921,505$ 4,874,760 $ 46,745 $ Claims payable 1,457,862 1,686,697 (228,835) Capital leases payable 2,376,171 2,413,785 (37,614) Loans payable - Safety Center 2,585,000 2,905,000 (320,000) Loans payable - CEC 608,753 777,055 (168,302) Net pension liability 68,415,153 63,023,722 5,391,431 Net OPEB liability 9,787,004 7,467,130 2,319,874 Total 90,151,448$ 83,148,149 $ 7,003,299 $ Governmental
Activities
City of San Marcos
Management’s Discussion and Analysis
For the Year Ended June 30, 2021
-15-
The City’s total debt increased by $7,003,299, or 8.4% during the current fiscal year. The increase was due to change in net pension liability offset by principal reduction as result of on- going debt service payments. Additional information on the City’s long-term debt can be found in Note 8, on pages 54-57 of this report.
ECONOMIC FACTORS AND NEXT YEAR'S BUDGET
The economy of the City is discussed in the accompanying Transmittal Letter.
The City was faced with financial difficulties, specifically the revenue crisis caused by the impacts of the global pandemic. At the creation and preparation of the FY 2021-22 budget the unemployment rate improved to 6.9% from an all-time high of 30% in May 2020 and the Consumer Price Index continued to rise by 4. 1%. The projected deficit that impacted our FY 2020-21 budget continued to be a concern with the development of the FY 2021-22 General Fund operating budget as the nation continued to experience economic turbulence resulting from the pandemic. The approved budget for FY 2021-22 General Fund operating budget projects a 6% increase in spending and revenue projections over the prior year with projected revenue not sufficient to cover budgeted expenditures.
Our normally anticipated expenditure increases have become a more significant challenge as the economic impacts of the global pandemic, caused by COVID-19 continue. To mitigate the economic challenges created by COVID-19, the City continues to mitigate increased costs through increased employee contributions to CalPERS and capping the City’s share of employee healthcare expenses. Still, the recommended FY 2021-22 operating budget was adopted at projected deficit of $2.56 million dollars with the assumption that by fiscal year end, it may need to be resolved through the use of reserve funds. However, the Federal American Rescue Plan Act provides for “Revenue Replacement Funding” which will offset some of the long-term revenue loss the City faced as a result of the pandemic
As the global and local economies emerge from the pandemic, unanticipated and unknown long-term effects on future revenue forecasts remain. Although economic indicators forecast a slightly positive outlook in sales tax, rental and charges for services, the City is continuing to work toward solutions to relieve the City’s growing pension burden.
Detailed information about the economic analysis, revenue assumptions, and other budgetary process parameters utilized in the budget preparation, can be obtained from the City’s FY 2021- 22 budget book, available on the City’s website or through the Finance Department.
REQUESTS FOR INFORMATION
This financial report is designed to provide a general overview of the City’s finances for all those with an interest in the government's finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Finance Department, 1 Civic Center Drive, San Marcos, California, 92069.
City of San Marcos
Statement of Net Position
June 30, 2021
The accompanying notes are an integral part of these financial statements. -16-
Permanent Fund
Governmental Business-Type Community
Activities Activities Total Foundation
ASSETS
Cash and investments (note 2) 161,973,334 $ 114,505 $ 162,087,839$ - $ Cash and investments with fiscal agents (note 2) 917,997 - 917,997 - Pension trust cash and investments (note 2) 2,889,350 - 2,889,350 - Investments in real estate (note 2) 53,425,000 95,610,000 149,035,000 - Investment in joint venture (note 14) 7,225,974 - 7,225,974 - Receivables:
Taxes and special assessments 3,643,556 - 3,643,556 - Accounts 2,911,013 415,169 3,326,182 - Interest 201,555 1,164 202,719 - Notes (note 3) 182,553,138 - 182,553,138 - Other (note 4) 1,999,588 661,139 2,660,727 - Due from other governments 7,058,969 - 7,058,969 - Advances to Successor Agency (note 17) 7,254,663 - 7,254,663 - Deposits 822,138 703,045 1,525,183 1,561,443 Prepaids - 2,879 2,879 - Land held for resale 741,681 - 741,681 - Capital assets, not depreciated (note 7) 372,674,700 - 372,674,700 - Capital assets, net of depreciation (note 7) 223,886,759 - 223,886,759 - Total Assets 1,030,179,415 97,507,901 1,127,687,316 1,561,443
DEFERRED OUTFLOWS OF RESOURCES
Pension related 14,952,782 - 14,952,782 - Loss on defeasance of debt 46,787 - 46,787 - OPEB related 2,241,532 - 2,241,532 - Total Deferred Outflows of Resources 17,241,101 - 17,241,101 -
LIABILITIES
Accounts payable 19,771,090 82,672 19,853,762 11,586 Accrued liabilities 2,122,630 - 2,122,630 - Due to other governments 9,300 - 9,300 74,541 Unearned revenue (note 6) 3,013,393 206,187 3,219,580 - Deposits payable 8,831,446 71,229 8,902,675 - Noncurrent liabilities:
Due within one year (note 8) 4,690,893 - 4,690,893 - Due in more than one year (note 8) 7,258,398 - 7,258,398 - Net pension liability, due in more than one year 68,415,153 - 68,415,153 - Total OPEB liability, due in more than one year 9,787,004 - 9,787,004 - Total Liabilities 123,899,307 360,088 124,259,395 86,127
DEFERRED INFLOWS OF RESOURCES
Pension related 797,099 - 797,099 - OPEB related 1,766,595 - 1,766,595 - Total Deferred Inflows of Resources 2,563,694 - 2,563,694 - NET POSITION (NOTE 10)
Net investment in capital assets 591,038,322 - 591,038,322 - Restricted for: - - 1,475,316 Affordable housing 222,040,542 - 222,040,542 - Lighting and landscape 16,822,490 - 16,822,490 - Public facilities 37,924,921 - 37,924,921 - Other purposes 17,196,505 - 17,196,505 - Unrestricted 35,934,735 97,147,813 133,082,548 - Total Net Position 920,957,515 $ 97,147,813 $ 1,018,105,328$ 1,475,316 $
City of San Marcos
Statement of Activities
For the Year Ended June 30, 2021
The accompanying notes are an integral part of these financial statements. -17-
Operating Capital
Charges for Grants and Grants and
Functions/Programs Expenses Services Contributions Contributions Governmental activities:
General government 24,133,604 $ 1,447,664 $ 1,952,462 $ 10,339,825 $ Community development 13,174,383 2,499,892 7,042,063 1,073,993 Public safety 45,837,054 13,464,941 315,351 5,225 Highways, streets, and parks 33,373,256 9,658,671 15,061,684 10,886,531 Culture and recreation 3,557,335 946,994 254,897 - Interest on long-term debt 259,529 - - - Total governmental activities 120,335,161 28,018,162 24,626,457 22,305,574 Business-type activities:
Creekside Marketplace 974,272 4,617,947 - - Total Primary Government 121,309,433 $ 32,636,109 $ 24,626,457 $ 22,305,574 $ Component Unit:
Permanent Fund Community
Foundation 84,837 $ - $ - $ - $ Total Component Unit 84,837 $ - $ - $ - $ Program Revenues
-18-
Permanent
Fund
Governmental Business-Type Community
Functions/Programs Activities Activities Total Foundation Governmental activities:
General government (10,393,653) $ - $ (10,393,653)$ - $ Community development (2,558,435) - (2,558,435) - Public safety (32,051,537) - (32,051,537) - Highways, streets, and parks 2,233,630 - 2,233,630 - Culture and recreation (2,355,444) - (2,355,444) - Interest on long-term debt (259,529) - (259,529) - Total governmental activities (45,384,968) - (45,384,968) - Business-type activities:
Creekside Marketplace - 3,643,675 3,643,675 - Total Primary Government (45,384,968) 3,643,675 (41,741,293) - Component Unit:
Permanent Fund Community
Foundation - - - (84,837) Total Component Unit - - - (84,837) General revenues:
Taxes:
Property taxes 24,980,971 - 24,980,971 - Transient occupancy taxes 871,393 - 871,393 - Business license tax 230,340 - 230,340 - Motor vehicle license tax 72,985 - 72,985 - Franchise fees 4,220,898 - 4,220,898 - Rental income 7,290,221 - 7,290,221 - Sales taxes shared state revenue, unrestricted 17,308,573 - 17,308,573 - Investment income, restricted 109,624 - 109,624 340,748 Investment income, unrestricted 1,921,787 2,483 1,924,270 - Loss on disposal and sale of capital assets (74,079) - (74,079) - Miscellaneous income 1,026,771 - 1,026,771 - Transfers (note 5) 3,400,000 (3,400,000) - - Total general revenues and transfers 61,359,484 (3,397,517) 57,961,967 340,748 Change in Net Position 15,974,516 246,158 16,220,674 255,911 Net Position, Beginning, as restated 904,982,999 96,901,655 1,001,884,654 1,219,405 Net Position, Ending 920,957,515 $ 97,147,813 $ 1,018,105,328$ 1,475,316 $ Net (Expense) Revenue
and Changes in Net Position
City of San Marcos
Balance Sheet
Governmental Funds
June 30, 2021
The accompanying notes are an integral part of these financial statements. -19-
Special Revenue Total
San Marcos Non-Major
Affordable Capital Governmental
General Housing Improvements Funds Total
Cash and investments (note 2) 59,158,707 $ 31,345,375 $ 3,528,854 $ 67,940,398 $ 161,973,334 $ Cash and investments with fiscal agents (note 2) - - - 917,997 917,997 Pension trust cash and investments (note 2) 2,889,350 - - - 2,889,350 Investments in real estate (note 2) 53,425,000 - - - 53,425,000 Investment in joint venture (note 14) 7,225,974 - - - 7,225,974 Receivables: -
Taxes and special assessments 3,615,508 - - 28,048 3,643,556 Accounts 2,800,240 27,263 - 83,510 2,911,013 Interest 66,798 38,959 5,957 89,841 201,555 Notes, net (note 3) 9,569,563 170,742,271 - 2,241,304 182,553,138 Other, net (note 4) 1,879,072 - - 120,516 1,999,588 Due from other governments 4,801,539 - 1,143,541 1,113,889 7,058,969 Advances to other funds (note 5) - 1,843,576 - - 1,843,576 Due from other funds (note 5) 267,661 427,500 - - 695,161 Advances to Successor Agency (note 17) - 7,254,663 - - 7,254,663 Deposits 822,138 - - - 822,138 Land held for resale 440,594 301,087 - - 741,681 Total Assets 146,962,144 $ 211,980,694 $ 4,678,352 $ 72,535,503 $ 436,156,693 $
RESOURCES AND FUND BALANCES
Liabilities:
Accounts payable 5,592,552 $ 216,837 $ 12,890,670$ 1,071,031 $ 19,771,090 $ Accrued liabilities 1,920,114 15,430 11,186 163,093 2,109,823 Due to other governments - - - 9,300 9,300 Advances from other funds (note 5) 1,843,576 - - - 1,843,576 Due to other funds (note 5) 427,500 - - 267,661 695,161 Unearned revenue (note 6) 761,920 - 2,251,473 - 3,013,393 Deposits payable 8,528,330 34,498 258,229 10,389 8,831,446 Total Liabilities 19,073,992 266,765 15,411,558 1,521,474 36,273,789 Unavailable revenue (note 6) 11,151,388 170,768,584 369,998 2,398,838 184,688,808 Nonspendable:
Land held for resale 440,594 - - - 440,594 Deposits 822,138 - - - 822,138 Investments in real estate (note 2) 53,425,000 - - - 53,425,000 Investment in joint venture (note 2) 7,225,974 - - - 7,225,974 Restricted:
Affordable housing - 40,945,345 - - 40,945,345 Transportation - - - 9,618,767 9,618,767 Lighting and landscape - - - 16,803,292 16,803,292 Pension trust 2,889,350 - - - 2,889,350 Capital improvements - - - 1,005,625 1,005,625 Public facilities - - - 37,788,031 37,788,031 Other purposes - - - 3,681,318 3,681,318 Assigned 11,864,630 - - - 11,864,630 Unassigned 40,069,078 - (11,103,204) (281,842) 28,684,032 Total Fund Balances 116,736,764 40,945,345 (11,103,204) 68,615,191 215,194,096 Total Liabilities, Deferred Inflows of Resources
and Fund Balances 146,962,144 $ 211,980,694 $ 4,678,352 $ 72,535,503 $ 436,156,693 $
LIABILITIES, DEFERRED INFLOWS OF
Deferred Inflows of Resources:
Fund Balances (note 9)(deficit):
ASSETS
City of San Marcos
Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position June 30, 2021
The accompanying notes are an integral part of these financial statements. -20-
Fund balances of governmental funds 215,194,096 $
Amounts reported for governmental activities in the Statement of Net Position are different because:
Capital assets, not depreciated 372,674,700 $
Capital assets, being depreciated 485,383,710
Less: accumulated depreciation (261,496,951) 596,561,459 46,787
debt has not been reported in the governmental funds. Therefore, interest payable is not reported as a liability in governmental funds. (12,807) reported in the governmental funds.
Pension related deferred outflows of resources 14,952,782 Pension related deferred inflows of resources (797,099) 14,155,683 reported in the governmental funds.
OPEB related deferred outflows of resources 2,241,532
OPEB related deferred inflows of resources (1,766,595) 474,937 are not reported in the funds.
Compensated absences (4,921,505)
Claims payable (1,457,862)
Capital lease financing (2,376,171)
Loans payable (3,193,753)
Net pension liability (68,415,153)
Total OPEB liability (9,787,004) (90,151,448)
funds. 184,688,808
Net position of governmental activities 920,957,515 $
Capital assets used in governmental activities are not financial resources, and therefore, are not reported in the governmental funds.
Deferred loss on defeasance of debt is deferred and amortized over the life of the bonds in the Statement of Net Position.
Other long-term assets are not available to pay for current period Accrued interest payable for the current portion of interest due on long-term expenditures and, therefore, are reported as unavailable revenue in the Long-term liabilities are not due and payable in the current period and therefore Deferred inflows and outflows of resources related to pensions have not been Deferred inflows and outflows of resources related to OPEB have not been City of San Marcos
Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds
For the Year Ended June 30, 2021
The accompanying notes are an integral part of these financial statements. -21-
Special Revenue Total
San Marcos Non-Major
Affordable Capital Governmental
General Housing Improvements Funds Total
REVENUES
Taxes and special assessments 26,082,704$ - $ - $ 9,253,728$ 35,336,432 $ Licenses and permits 5,758,317 - - - 5,758,317 Intergovernmental 29,945,805 - 10,851,563 9,977,486 50,774,854 Charges for services 17,466,496 - - - 17,466,496 Developer fees 26,992 2,048,466 - 5,750,727 7,826,185 Fines and forfeitures 116,069 - 141,500 - 257,569 Investment and rental income 6,991,645 1,015,245 13,616 761,761 8,782,267 Miscellaneous 623,786 398,895 - 140,644 1,163,325 Total Revenues 87,011,814 3,462,606 11,006,679 25,884,346 127,365,445
EXPENDITURES
Current:
General government 21,890,560 325,182 - - 22,215,742 Community development 5,120,026 7,589,446 - 614,068 13,323,540 Public safety 42,204,560 - - - 42,204,560 Highways, streets and parks 9,758,813 - - 8,279,827 18,038,640 Culture and recreation 2,891,449 - - 357,526 3,248,975 Capital outlay 4,866 - 30,998,915 66,309 31,070,090 Debt service:
Principal 701,129 - - 410,201 1,111,330 Interest and fiscal charges 154,028 - - 71,822 225,850 Total Expenditures 82,725,431 7,914,628 30,998,915 9,799,753 131,438,727 Excess (Deficiency) of Revenues
Over (Under) Expenditures 4,286,383 (4,452,022) (19,992,236) 16,084,593 (4,073,282)
OTHER FINANCING SOURCES (USES)
Capital leases 585,414 - - - 585,414 Sale of general capital assets 2,427,572 - - - 2,427,572 Transfers in (note 5) 4,107,198 142,500 12,396,998 868,487 17,515,183 Transfers out (note 5) (2,066,815) - - (12,048,368) (14,115,183) Total Other Financing Sources (Uses) 5,053,369 142,500 12,396,998 (11,179,881) 6,412,986 Net Change in Fund Balances 9,339,752 (4,309,522) (7,595,238) 4,904,712 2,339,704 Fund Balances, Beginning, as restated 107,397,012 45,254,867 (3,507,966) 63,710,479 212,854,392 Fund Balances, Ending 116,736,764$ 40,945,345 $ (11,103,204) $ 68,615,191 $ 215,194,096 $
City of San Marcos
Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities For the Year Ended June 30, 2021
The accompanying notes are an integral part of these financial statements. -22-
Net change in fund balances - total governmental funds 2,339,704 $ Amounts reported for governmental activities in the Statement of Activities are different because:
Capital asset expenditures capitalized 27,112,367 $
Depreciation expense, net of deletions to capital assets (17,240,167) 9,872,200 change during the year.
Long-term loans receivable 5,618,311
Principal payments on long-term debt 1,111,330
Capital leases (585,414)
Changes in pension related items (2,167,768)
Changes in OPEB related items (362,258) (2,004,110) Change in compensated absences (46,745)
Change in claims payable 228,835
Change in accrued interest (1,332)
Amortization of prepaid insurance (26,498)
Amortization of deferred loss (5,849) 148,411 Change in net position of governmental activities 15,974,516 $ Certain revenues in the governmental funds are deferred inflows of resources because they are measurable but not available under the modified accrual basis of accounting. However, the revenues are included on the accrual basis used in the government-wide statements. This amount represents the the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which depreciation exceeded capital outlays in the current period.
Governmental funds report capital outlays as expenditures. However, in expenditures in governmental funds.
Some expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as The issuance of long-term debt (i.e. bonds, capital leases) provides current financial resources to governmental funds, while the repayment of the principal of long-term debt consumes the current financial premiums, discounts, and similar items when the debt is first issued, whereas these amounts are deferred and amortized in the statement of resources of governmental funds. Neither transaction, however, has any effect on net position. Also, governmental funds report the effect of activities.
City of San Marcos
Statement of Net Position
Proprietary Funds
June 30, 2021
The accompanying notes are an integral part of these financial statements. -23-
Creekside
Marketplace
Current Assets:
Cash and investments (note 2) 114,505 $
Investments in real estate (note 2) 95,610,000
Receivables:
Accounts 415,169
Interest 1,164
Prepaids 2,879
Deposits 703,045
Total Current Assets 96,846,762
Noncurrent Assets:
Other receivable (note 4) 661,139
Total Noncurrent Assets 661,139
Total Assets 97,507,901
Current Liabilities:
Accounts payable 82,672
Deposits payable 71,229
Unearned revenue 206,187
Total Liabilities 360,088
Unrestricted 97,147,813
Total Net Position 97,147,813 $
LIABILITIES
NET POSITION
Enterprise Fund
ASSETS
City of San Marcos
Statement of Revenues, Expenses and Changes in Fund Net Position Proprietary Funds
For the Year Ended June 30, 2021
The accompanying notes are an integral part of these financial statements. -24-
Creekside
Marketplace
OPERATING REVENUES
Rental income 4,035,031 $
Common area maintenance charges 582,916
Total Operating Revenues 4,617,947
OPERATING EXPENSES
Property management 410,482
Janitorial 158,841
Repairs and maintenance 404,949
Total Operating Expenses 974,272
Operating Income 3,643,675
NON-OPERATING REVENUES
Investment income 2,483
Total Non-Operating Revenues 2,483
Income Before Transfers 3,646,158
TRANSFERS
Transfers out (note 5) (3,400,000)
Total Transfers (3,400,000)
Change in Net Position 246,158
Net Position, Beginning 96,901,655
Net Position, Ending 97,147,813 $
Enterprise Fund
City of San Marcos
Statement of Cash Flows
Proprietary Funds
For the Year Ended June 30, 2021
The accompanying notes are an integral part of these financial statements. -25-
Enterprise Fund
Creekside
Marketplace
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers 4,292,347 $
Payments to suppliers for goods and services (974,272)
Net cash provided by operating activities 3,318,075
CASH FLOWS FROM NONCAPITAL FINANCING
ACTIVITIES
Receipts from settlement agreement 24,366
Transfer to general fund (3,400,000)
Net cash (used for) noncapital financing
activities (3,375,634)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest received 2,944
Net increase (decrease) in cash and cash equivalents (54,615) Cash and cash equivalents, beginning 169,120
Cash and cash equivalents, ending 114,505 $
RECONCILIATION OF OPERATING INCOME TO NET
CASH PROVIDED BY OPERATING ACTIVITIES:
Operating income 3,643,675 $
Adjustments to reconcile operating income to net
cash provided by operating activities:
(Increase) decrease in operating receivables:
Accounts receivable (229,115)
Prepaids (2,879)
Deposit receivable 450,696
Increase (decrease) in operating liabilities:
Accounts payable (574,350)
Unearned revenue 38,929
Net cash provided by for operating activities 3,318,075 $ City of San Marcos
Statement of Fiduciary Net Position
Fiduciary Funds
June 30, 2021
The accompanying notes are an integral part of these financial statements. -26-
Private-Purpose Custodial
Trust Fund Funds
Cash and investments (note 2) - $ 101 $ Receivables:
Special assessments - 21,931
Interest - 20
Direct financing lease 1,722,205 -
Prepaid expenses 276,987 -
Restricted Assets:
Cash and investments with
fiscal agents (note 2) 51,701,036 9,838,612
Total Assets 53,700,228 9,860,664
Loss on defeasance of debt 9,258,426 -
Accounts payable 9,531 161,372
Accrued liabilities 7,967 -
Accrued interest payable 2,354,004 -
Due to other governments 3,959,340 17,280
Noncurrent Liabilities: -
Due within one year 12,800,000 -
Due in more than one year 242,249,484 -
Total Liabilities 261,380,326 178,652
Restricted for:
Other taxing entities and other agencies (198,421,672) $ 9,682,012 $ ASSETS
LIABILITIES
NET POSITION (DEFICIT)
DEFERRED OUTFLOWS OF RESOURCES
City of San Marcos
Statement of Changes in Fiduciary Net Position
Fiduciary Funds
For the Year Ended June 30, 2021
The accompanying notes are an integral part of these financial statements. -27-
Private-Purpose Custodial
Trust Fund Funds
ADDITIONS
Tax 25,178,257 $ - $
Income from property and investments (133,352) 62,325 Tax collections for other agencies - 7,595,681 Debt proceeds collected for other agencies - 20,295,000 Other revenue 140,155 21,764
Total Additions 25,185,060 27,974,770
DEDUCTIONS
General and administrative 6,501,452 -
Interest expense and fees 10,019,881 -
Adminitrative expense - 1,240,602
Payments to fiscal agent on behalf
of other agencies - 28,670,331
Total Deductions 16,521,333 29,910,933
Change in Net Position 8,663,727 (1,936,163)
Net Position (Deficit), Beginning, as restated (207,085,399) 11,618,175 Net Position (Deficit), Ending (198,421,672) $ 9,682,012 $
City of San Marcos
Index to Notes to Basic Financial Statements
For the Year Ended June 30, 2021
-28-
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES....................................................... . 30 A) Description of Reporting Entity........................................................................................... . 30 B) Basis of Presentation........................................................................................................ .. 32 C) Measurement Focus, Basis of Accounting, and Financial Statement Presentation............. 32 D) Fund Classifications……………………………………………………………………..….…… 33 E) Financial Statement Elements
(1) Cash and Investments ............................................................................................... 34 (2) Receivables and Payables.......................................................................................... 34 (3) Prepaid Items............................................................................................................. . 35
(4) Land Held for Resale.................................................................................................. 35 (5) Notes Receivable ....................................................................................................... 35 (6) Deferred Outflows/Inflows of Resources..................................................................... 35 (7) Program Revenues..................................................................................................... 36 (8) Property Taxes........................................................................................................... . 36
(9) Proprietary Funds Operating and Nonoperating Revenues and Expenses.................. 36 (10) Capital Assets............................................................................................................. 37 (11) Compensated Absences…......................................................................................... . 37 (12) Reclassifications and Eliminations.............................................................................. 37 (13) Long-Term Obligations .............................................................................................. 38 (14) Postemployment Benefits other than Pensions (OPEB) …......................................... 38 (15) Pension Plans …........................................................................................................ 38 (16) Use of Estimates ....................................................................................................... . 39
(17) Fund Balances ........................................................................................................... 40 (18) Net Position Flow Assumption.................................................................................... . 40 (19) New Accounting Pronouncements 40
NOTE 2 CASH AND INVESTMENTS.................................................................................................... . 41 NOTE 3 NOTES RECEIVABLE......................................................................................................... ..... 48 NOTE 4 OTHER RECEIVABLES........................................................................................................ ... 50 NOTE 5 INTERFUND RECEIVABLES AND TRANSFERS.................................................................... 50 NOTE 6 UNAVAILABLE/UNEARNED REVENUE.................................................................................. 52 NOTE 7 CAPITAL ASSETS……………................................................................................................. . 53 NOTE 8 LONG-TERM LIABILITIES……................................................................................................ 54 NOTE 9 FUND BALANCE CLASSIFICATIONS……………………………………………………………… 58 NOTE 10 NET POSITION CLASSIFICATIONS……................................................................................ 59 City of San Marcos
Index to Notes to Basic Financial Statements
For the Year Ended June 30, 2021
-29-
NOTE 11 RETIREMENT PLAN……….……………………………............................................................. 60 NOTE 12 OTHER POSTEMPLOYMENT BENEFITS (OPEB)……………………………………………… … 72 NOTE 13 INSURANCE….............................................................................................................. ........... 77 NOTE 14 JOINT VENTURES……........................................................................................................ ... 80 NOTE 15 ASSESSMENT DISTRICT, COMMUNITY FACILITIES DISTRICTS BONDS AND CONDUIT DEBT........................................................................................................ . 82 NOTE 16 COMMITMENTS AND CONTINGENT LIABILITIES................................................................. 83 NOTE 17 SUCCESSOR AGENCY TRUST FOR ASSETS OF FORMER
REDEVELOPMENT AGENCY............................................................................................ 83 NOTE 18 OTHER REQUIRED NOTE DISCLOSURES........................................................................... . 90
NOTE 19 COVID-19 CONSIDERATIONS............................................................................................... . 90 NOTE 20 SUBSEQUENT EVENT 90
NOTE 21 PRIOR PERIOD RESTATEMENT ........................................................................................... 91
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
-30-
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A) Description of Reporting Entity
The City of San Marcos, California (the City) was incorporated on January 25, 1963 and became a Charter City on July 4, 1994. The City operates under a Council-Manager form of government and provides the following servic es as authorized by its charter: general government, community development, public safety, highways, streets and parks, public works, and culture and recreation.
These financial statements present the financial status of the City and its component units, which are included in the City’s reporting entity because of the significance of their operational or financial relationships with the City.
Component Units
Component units are entities for which the City is considered to be financially accountable, in accordance with generally accepted accounting principles. The City is considered to be financially accountable for an organization if the City appoints a voting majority of that organization's governing body and (1) it is able to impose its will on that organization, or (2) there is a potential for the organization to provide specific financial benefits to or impose specific financial burdens on the City. The City is also considered to be financially accountable if an organization is fiscally dependent (i.e., it is unable to adopt its budget, levy taxes, set rates or charges, or issue bonded debt without approval from the City). In certain cases, other organizations are included as component units if the nature and significance of their relationship with the City are such that their exclusion would cause the City's financial statements to be misleading or incomplete. Blended component units, although legally separate entities, are, in substance, part of the City's operations, and data from these units are combined with data of the primary government. Based on the criteria above, the City has four component units, one discretely presented component unit and three blended component units.
These component units are described as follows:
Discretely Presented Component Unit
The San Marcos Community Foundation (Foundation) was established, and by-laws were adopted on October 27, 1987. On June 10, 1988, the San Marcos Community Foundation was incorporated and organized under the California Nonprofit Public Benefit Corporation Law for public and charitable purposes. As part of the by-laws, the City of San Marcos is to provide financial and investment services to the Foundation at no cost. The Foundation provides financial and other assistance to worthy programs which benefit the City and residents of San Marcos. Assets of the Foundation are reported in a Permanent Fund as only the interest earnings on the original principal of $1,000,000 can be spent on Foundation activity. The amount that is available for spending is the balance over the original endowment and is reported on the balance sheet as restricted fund balance. No less than 4% or more than 5% of total assets may be distributed in any one year as long as total assets do not fall below the original principal.
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
-31-
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (continued)
A) Description of Reporting Entity, (continued)
Component Units, (continued)
Blended Component Units
The San Marcos Public Facilities Authority (Facilities Authority) is a joint powers authority organized pursuant to the State of California Government Code, Section 6500. The Facilities Authority exists under a Joint Exercise of Power Agreement dated June 1989, between the City of San Marcos and the former Redevelopment Agency of the City of San Marcos (now the Successor Agency). Its purpose is to facilitate financing for public capital improvements of the City and the Agency.
The California Mobilehome Financing Authority (CAMPFA) is a joint powers authority organized pursuant to the State of California Government Code, Section 6500. CAMPFA exists under a Joint Exercise of Powers Agreement dated May 9, 1995, between the City of San Marcos and the former Redevelopment Agency of the City of San Marcos (now the Successor Agency). Its purpose is to facilitate financing for public capital improvements to be owned by its members and to establish a vehicle which may reduce local borrowing costs and promote the greater use of existing and new financial instruments and mechanisms.
The San Marcos Public Financing Authority (Financing Authority) was established pursuant to a Joint Exercise of Powers Agreement, dated December 14, 1993, a subsequently amended and restated by an Amended and Restated Joint Exercise of Powers Agreement, dated January 10, 2012, each by and between the City and the Fire Protection District (FPD). The Financing Authority was created for the purpose of financing and refinancing of public capital improvements for, and working capital requirements of, the City, the FPD or any other local agency, including community facilities districts created by the City or the FPD, through the construction and/or acquisition by the Financing Authority of such public capital improvements and/or by the Financing Authority of bonds of the City, FPD or any other local agency pursuant the bond purchase agreements and/or the lending of funds by the Financing Authority to the City, the FPD or any other local agency. The Financing Authority is governed by a board of five directors, which is composed of the member of the City Council. The Executive Director of the Financing Authority is the City Manager of the City. The Financing Authority is specifically granted all of the powers specified in the Bond Law, including but not limited to the power to issue bonds and to sell such bonds to public or private purchasers at public or negotiated sale. The Financing Authority is entitled to exercise powers common to its members and necessary to accomplish the purpose for which it was formed. The Financing Authority has no independent staff, and consequently it will be completely dependent upon the officers and employees of the City to administer its program.
Separate financial statements are not prepared for these entities.
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
-32-
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (continued)
B) Basis of Presentation
The City’s basic financial statements are prepared in conformity with accounting principles generally accepted in the United States of America. The Governmental Accounting Standards Board is the acknowledged standard setting body for establishing accounting and financial reporting standards followed by governmental entities in the United States of America.
Government-Wide 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 nonfiduciary activities of the City and its blended component units. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on user fees and charges for support.
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 to a specific function or segment. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment.
Taxes and other items not classified as program revenues are reported as general revenues.
As a general rule the effect of interfund activity has been removed from the government-wide financial statements. However, the effect of interfund services provided and used between functions has not been eliminated in the statement of activities.
Fund Financial Statements
Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter are excluded from the Government-Wide Financial Statements. Major individual governmental funds and major individual enterprise funds are reported in separate columns in the Fund Financial Statements.
C) Measurement Focus, Basis of Accounting, and Financial Statement Presentation
The Government-Wide Financial Statements are reported using the economic resources measurement focus and the accrual basis of a ccounting, as are the Proprietary Fund Financial Statements. Agency funds use the accrual ba sis of accounting, but have no measurement focus. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. In applying the susceptible to accrual concept to intergovernmental revenues, the legal and contractual requirements of the individual programs are used as guidance. Property taxes are recognized as revenues in the year for which they are levied.
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
-33-
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (continued)
C) Measurement Focus, Basis of Accounting, and Financial Statement Presentation, (continued)
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 available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the City considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Reimbursements under state and federal grants are accrued if received within 180 days. Revenues that are accrued generally include real property taxes, sales tax, transient occupancy taxes, franchise fees, vehicle license fees, highway users’ tax, interest, and some state and federal grants.
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.
D) Fund Classifications
The City reports the following major governmental funds:
General Fund
The General Fund is the City’s primary operating fund. It accounts for all financial resources of the City, except those required to be accounted for in another fund.
San Marcos Affordable Housing Fund
The San Marcos Affordable Housing Fund accounts for the in-lieu revenue received from developers to provide for affordable housing. The fund also accounts for the low and moderate income housing receivables of the former City of San Marcos Redevelopment Agency.
Capital Improvements Fund
The Capital Improvements Fund is used to account for capital projects funded with Federal and other grants and developer contributions.
The City reports the following major proprietary fund:
Creekside Marketplace Fund
The Creekside Marketplace Fund accounts for the activities of a City-owned shopping center.
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
-34-
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (continued)
D) Fund Classifications, (continued)
Additionally, the City reports the following fund types:
Private-Purpose Trust Fund
The Private-Purpose Trust Fund accounts for the activities of the Redevelopment Obligation Retirement Funds, which accumulates resources for obligations previously incurred by the former City of San Marcos Redevelopment Agency.
Custodial Funds
The Custodial Funds account for assets held by the City in a custodial capacity. These funds include refundable deposits and also account for the collection of special assessments levied on various Assessment Districts and Community Facilities Districts property owners for the payment of debt service on no commitment debt.
E) Financial Statement Elements
(1) Cash and Investments
The City follows the practice of pooling cash and investments of all funds except for funds required to be held by outside fiscal agents under the provisions of bond indentures. Each fund’s share in this pool is displayed in the accompanying financial statements as cash and investments. Interest income earned on pooled cash and investments is allocated monthly to the various funds based on the month-end cash and investment balances. Interest income from cash and investments with fiscal agents is credited directly to the related fund.
The City’s cash and cash equivalents ar e 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.
Investments are reported at fair value. The State Treasurer’s Investment Pool operates in accordance with appropriate state laws and regulations. The reported value of the pool is the same as the fair value of the pool shares.
(2) 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 either “due to/from other funds” (i.e., the current portion of interfund loans) or “advances to/from other funds” (i.e., the non- current portion of interfund loans). Any residual balances outstanding between the governmental activities and business-type acti vities are reported in the government-wide financial statements as “internal balances.”
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
-35-
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (continued)
E) Financial Statement Elements, (continued)
(2) Receivables and Payables, (continued)
Advances between funds, as reported in the fund financial statements, are offset by a fund balance reserve in applicable governmental funds to indicate that they are not available for appropriation and are not expendable available financial resources.
(3) Prepaid Items
Certain payments to vendors for costs applicable to future accounting periods are recorded as prepaid items in both government-wide and fund financial statements using the consumption method.
(4) Land Held for Resale
Land held for resale is valued at the lower of cost or market once such amount becomes determinable upon entering into a contract for sale. Land held for resale is reflected as nonspendable or restricted fund balance in the fund financial statements to indicate that the asset does not constitute available, spendable resources.
(5) Notes Receivable
The accompanying financial statements reflect the recording of certain notes receivable that represent loans made to private developers and other parties. In certain cases, the amount of collection is dependent upon future residual receipts to be generated by the property or contingent upon the ability of the owner to sell the property at an amount sufficient to pay all liens against the property.
(6) Deferred Outflows/Inflows of Resources
In addition to assets, the statement of net position (balance sheet) will sometimes report a separate section for deferred outflows of resources. This separate financial element, deferred outflows of resources, represents a consumption of net position or fund balance that applies to future periods and so will not be recognized as an outflow of resources (expense/expenditure) until then. In addition to liabilities, the statement of net position (balance sheet) will sometimes report a separate section for deferred inflows of resources.
This separate financial element, deferred inflows of resources, represents an acquisition of net position or fund balance that applies to future periods and so will not be recognized as an inflow of resources (revenue) until that time.
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
-36-
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (continued)
E) Financial Statement Elements, (continued)
(7) Program Revenues
Amounts reported as program revenues include 1) charges to customers or applicants for goods, services, or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions. Internally dedicated resources, such as taxes, are reported as general revenues rather than program revenues.
(8) Property Taxes
Property taxes attach as an enforceable lien on property as of March 1. Taxes are levied on July 1 and are payable in two installments on December 10 and April 10. The County of San Diego (the County) bills and collects the property taxes and remits them to the City in installments during the year. City property tax revenues are recognized when levied to the extent that they result in current receivables.
The County is permitted by State Law (Proposition 13) to levy taxes at 1% of assessed value. The assessed value can only increase each year by inflation with a maximum of 2%.
The City receives a share of this basic levy proportionate to what it received in the 1976 to 1978 period.
(9) Proprietary Funds Operating and Nonoperating Revenues and Expenses
Proprietary funds distinguish operating revenues and expenses from nonoperating 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 City’s proprietary funds are charges to customers for sales and services and lease revenue. The City also recognizes new account charges, late fees and contributions from other agencies as operating revenues. Operating expenses for the enterprise funds include the cost of sales and services, and general and administrative expenses. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses.
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
-37-
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (continued)
E) Financial Statement Elements, (continued)
(10) Capital Assets
Capital assets, which include property, buildings, equipment, and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items) ar e reported in the applicable governmental or business-type activities columns in the government-wide financial statements and the enterprise funds in the fund financial statements. Capital assets are defined by the government as assets with an initial indivi dual cost of $5,000 or more and an estimated useful life in excess of two years. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at the estimated acquisition value at the time of acquisition.
The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed.
Capital assets are depreciated using the straight-line method over the following estimated useful lives. Depreciation starts the year following acquisition.
Years
Buildings 50
Furniture and Equipment 3-10
Infrastructure 20-50
(11) Compensated Absences
Vacation pay is payable to employees at the time used or upon termination of employment.
Sick leave accrued but unused is cumulative from year to year. Employees are allowed to cash out sick leave hours over certain balances once a year and upon termination. All vacation pay and applicable sick leave is accrued when incurred in the government-wide financial statements. A liability for these amounts is reported in governmental funds only if they have matured, for example, as a result of employee resignations and retirements. All compensated absences are liquidated in the General Fund.
(12) Reclassifications and Eliminations
Interfund balances must generally be eliminated in the government-wide statements, except for net residual amounts due between governmental activities. Amounts involving fiduciary funds should be reported as external transactions. Any allocations must reduce the expenses of the function from which the expenses are being allocated, so that the expenses are reported only once in the function in which they are allocated.
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
-38-
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (continued)
E) Financial Statement Elements, (continued)
(13) Long-Term Obligations
In the government-wide financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities. Bond premiums and discounts are deferred and amortized over the life of the bonds using the straight-line method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are expensed during the current period.
In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other 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.
(14) Postemployment Benefits other than Pensions (OPEB)
For purposes of measuring the net OPEB liab ility, 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 (O PEB Plan) and additions to/deductions from the OPEB Plan’s fiduciary net position have been determined on the same basis. For this purpose, benefit payments are reported at fair value.
GASB Statement No. 75, which was implemented in the current year, requires that the reported results must pertain to liability and asset information within certain defined timeframes. For this report, the following timeframes are used:
Valuation Date June 30, 2020
Measurement Date June 30, 2020
Measurement Period July 1, 2019 to June 30, 2020
(15) Pension Plans
For purposes of measuring the net pension liability, deferred outflows and inflows of resources related to pensions, and pension expense, information about the fiduciary net position and additions to/deductions from the fiduciary net position have been determined on the same basis as they are reported by the CalPERS Financial Office. For this purpose, benefit payments (including refunds of em ployee contributions) are recognized when currently due and payable in accordance with the benefit terms. Investments are reported at fair value. CalPERS audited financial statements are publicly available reports that can be obtained at CalPERS’ website at www.calpers.ca.gov.
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
-39-
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (continued)
E) Financial Statement Elements, (continued)
(15) Pension Plans, (continued)
GASB Statement No. 68 requires that the reported results must pertain to liability and asset information within certain defined timeframes. For this report, the following timeframes are used.
Valuation Date (VD) June 30, 2019
Measurement Date (MD) June 30, 2020
Measurement Period (MP) July 1, 2019 to June 30, 2020
(16) Use of Estimates
The financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and necessarily include amounts based on estimates and assumptions by management. Actual results could differ from those amounts.
(17) Fund Balances
Fund balances are reported in the fund financial statements in the following classifications:
Nonspendable Fund Balance – this includes amounts that cannot be spent because they are either not spendable in physical form (such as inventory) or that are legally or contractually required to be maintained intact (such as endowments).
Restricted Fund Balance – this includes amounts that can be spent only for specific purposes stipulated by external legal requirements imposed by other governments, external resource providers, or creditors. Restrictions imposed by the City Council do not create restricted fund balance unless the legal document that initially authorized the revenue (associated with that portion of fund balance) also included language that specified the limited use for which the authorized revenues were to be expended.
Committed Fund Balance – this includes amount s that can only be used for specific purposes pursuant to constraints imposed by formal action of the City Council. Those committed amounts cannot be used for any other purpose unless the City Council removes or changes the specified use by taking the same type of action that it employed to previously commit those amounts. If the Council ac tion that limits the use of the funds was separate from the action that initially created the revenues that form the basis for the fund balance, then the resultant fund balance is considered to be committed, not restricted. The City Council considers a resolution to constitute a formal action of the City Council for the purposes of establishing committed fund balance.
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
-40-
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (continued)
E) Financial Statement Elements, (continued)
(17) Fund Balances, (continued)
Assigned Fund Balance – this includes amounts that are intended to be used for specific purposes as indicated either by the City Counc il or by persons to whom the City Council has delegated the authority to assign amounts for specific purposes. The City Council has not delegated such authority to others in the City, and therefore retains its authority to assign fund balance.
Unassigned Fund Balance – this includes negative fund balance in governmental funds and the remaining spendable amounts which are not included in one of the other classifications in the General Fund. The General Fund is the only fund that reports a positive unassigned fund balance amount.
In order to calculate the amounts to report as restricted, committed, assigned, and unassigned fund balance in the governmental fund financial statements, a flow assumption must be made about the order in which the resources are considered to be applied. It is the City’s policy that restricted resources will be applied first, followed by (in order of application) committed, assigned, and unassigned resources, in the absence of a formal policy adopted by the City Council.
(18) Net Position Flow Assumption
Sometimes the City will fund outlays for a particular purpose from both restricted (e.g. restricted bond or grant proceeds) ad unrestricted resources. In order to calculate the amounts to report as restricted net position and unrestricted net position in the financial statements a flow assumption must be made about the order in which the resources are considered to be applied. It is the City’s policy to consider restricted net position to have been depleted before unrestricted net position is applied.
(19) New Accounting Pronouncements
During the fiscal year ended June 30, 2021, the City implemented the following GASB standard:
GASB Statement No. 84 – The Governmental Accounting Standards Board (GASB) has issued Statement No. 84, Fiduciary Activities. The primary objective of the statement is to improve guidance regarding the identification of fiduciary activities for accounting and financial reporting purposes and how those activities should be reported.
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
-41-
2) CASH AND INVESTMENTS
Cash and investments are classified in the accompanying financial statements as follows:
Statement of net position:
Cash and investments $ 162,087,839
Cash and investments with fiscal agents 917,997 Pension trust cash and investments 2,889,350 Investments in real estate 149,035,000
Investment in joint venture 7,225,974
Statement of fiduciary net position:
Private-Purpose Trust Fund
Cash and investments with fiscal agents 51,701,036
Custodial Funds
Cash and investments 101
Cash and investments with fiscal agents 9,838,612 Total Cash and Investments $ 383,695,909
Cash and investments at June 30, 2021 consisted of the following:
Demand deposits $ 13,483,036
Local Agency Investment Pool (LAIF) 41,299,220 California Asset Management Pool (CAMP) 41,761,465 Federal Agency Securities 25,510,012
U.S. Treasury Obligations 19,125,840
U.S. Corporate 13,637,494
Municipal Obligations 791,295
Asset-Backed Securities 4,392,512
Collateralized Mortgage Obligations 1,695,002 Money Market Mutual Funds 65,739,059
Real Estate 149,035,000
Joint Venture 7,225,974
Total Cash and Investments $ 383,695,909
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
-42-
2) CASH AND INVESTMENTS, (continued)
Investments Authorized by the California Government Code and the City’s Investment Policy
The table below identifies the investment types that are authorized by the California Government Code and the City’s investment policy. In addition to the table below, the investment policy specifies that the City may invest in other investments that are, or may become, legal investments through the State of California Government Code and with prior approval of the City Council. The table also identifies certain provisions of the City’s investment policy that address interest rate risk and concentration of credit risk. This table does not address investments of debt proceeds held by bond trustee that are governed by the provisions of debt agreements rather than the general provisions of the California Government Code or the City’s investment policy.
Authorized Maximum Maximum
Investment Type B y City Maximum Percenta ge Investmen t Authorized by State Law Polic y Maturit y of Portfolio in One Issuer
U.S. Treasury Obligations Yes 5 years None None
Federal Agency Securities Yes 5 years None None
Municipal Obligations Yes 5 years 30% 5%
Supranationals Yes 5 years 30% 10%
Bankers’ Acceptances Yes 180 days 40% 10%
Commercial Paper Yes 270 days 15% 5%
Negotiable Certificates of
Deposit
Yes
5 years
30%
5%
Repurchase Agreements Yes 30 days 50% None
Reverse Repurchase
Agreements
No
1 year
20%
None
US Corporate Medium
Term Notes
Yes
5 years
30%
None
Mutual Funds No N/A 20% 10%
Money Market Mutual
Funds
Yes
N/A
20%
10%
Mortgage Pass-Through
Securities
Yes
5 years
10%
5%
Asset-Backed Securities Yes 5 years 10% None
Collateralized Mortgage
Obligations
Yes
5 years
10%
None
Local Agency Investment
Fund (LAIF)
Yes
N/A
None
$75 million per
entity
California Asset
Management Program
(CAMP)
Yes
N/A
None
None
County Pooled
Investment Funds
No
N/A
None
None
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
-43-
2) CASH AND INVESTMENTS, (continued)
Investments Authorized by Debt Agreements
Investments of debt proceeds held by bond trustee are governed by provisions of the debt agreements, rather than the general provisions of the California Government Code or the City’s investment policy. The table below identifies the investment types that are generally authorized for investments held by bond trustee. The table also identifies certain provisions of these debt agreements that address interest rate risk and concentration of credit risk.
Maximum Maximum
Maximum Percenta ge Investmen t
Authorized Investment Type Maturit y Allowed in One Issuer
U.S. Treasury Obligations None None None
Federal Agency Securities None None None
Bankers’ Acceptances 180 da ys None None
Commercial Paper 270 da ys None None
Repurchase Agreements 180 days None None
Money Market Mutual Funds N/ A None None
Local Agency Investment Fund (LAIF) N/ A None $75 million per entit y Investment Contracts None None None
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
-44-
2) CASH AND INVESTMENTS, (continued)
Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater is the sensitivity of its fair value to changes in market interest rates. One of the ways that the City manages its exposure to interest rate risk is by purchasing a combination of shorter term and longer term investments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary to provide the cash flow and liquidity needed for operations.
Information about the sensitivity of the fair values of the City’s investments (including investments held by bond trustee) to market interest rate fluctuations is provided by the following table that shows the distribution of the City’s investments by maturity:
12 Months 13 to 36 37 to 60
Total or Less Months Months N/A
Federal Agency Securities 25,510,012 $ 3,477,496 $ 7,714,515 $ 14,318,001 $ - $ U.S. Treasury Obligations 19,125,840 2,340,858 5,890,184 10,894,798 - U.S. Corporate 13,637,494 550,129 6,408,610 6,678,755 - Municipal Obligations 791,295 - - 791,295 - Asset-Backed Securities 4,392,512 - 1,408,345 2,984,167 - Collateralized Mortgage Obligations 1,695,002 - 1,695,002 - - Money Market Mutual Funds 3,284,534 3,284,534 - - - LAIF 41,299,220 41,299,220 - - - CAMP 41,761,465 41,761,465 - - - Held by bond trustees:
Money Market Mutual Funds 61,463,078 61,463,078 - - - U.S. Treasury Obligations 991,447 - 991,447 - - Real Estate 149,035,000 - - - 149,035,000 Total 362,986,899 $ 154,176,780 $ 24,108,103 $ 35,667,016 $ 149,035,000 $ Investment Type
Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization.
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
-45-
2) CASH AND INVESTMENTS, (continued)
Credit Risk, (continued)
Presented below is the minimum rating required by the California Government Code, the City’s investment policy, or debt agreements and the act ual rating as of year-end for each investment type.
Minimum Standard &
Legal Poor's Rating
Total Rating as of Year End
Federal Agency Securities $ 25,510,012 N/A N/A
U.S. Treasury Obligations 19,125,840 N/A N/A
U.S. Corporate 13,637,494 N/A N/A
Municipal Obligations 791,295 N/A N/A
Asset-Backed Securities 4,392,512 N/A AAA
Collateralized Mortgage Obligations 1,695,002 N/A AA- Money Market Mutual Funds 3,284,534 N/A AAA
LAIF 41,299,220 N/A Not Rated
CAMP 41,761,465 N/A AAA
Held by bond trustees:
Money Market Mutual Funds 61,463,078 A AAA
U.S. Treasury Obligations 991,447 N/A N/A Real Estate 149,035,000 N/A Not Rated
Total $ 362,986,899
Investment Type
Concentration of Credit Risk
The investment policy of the City contains no limitations on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code. Investments in any one issuer other than external investment pools and mutual funds that represent 5% or more of the total City investments (or 5% or more of any major fund or non-major funds in the aggregate) must be disclosed. There are no investments at June 30, 2021 that meet the above criteria.
Custodial Credit Risk
Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g., broker- dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party.
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
-46-
2) CASH AND INVESTMENTS, (continued)
Custodial Credit Risk, (continued)
The California Government Code requires that a financial institution secure deposits made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under state law. The market value of the pledged securities in the collateral pool must equal at least 110% of the total amount deposited by the public agencies.
California law also allows financial institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits. The City’s investment policy requires that all securities owned by the City be held in safekeeping by a third party bank trust department acting as agent for the City under the terms of a custody agreement executed by the bank and by the City. At June 30, 2021, the City deposits (bank balances) were collateralized under California Law.
Investment in State Investment Pool
The City is a voluntary participant in the Local Agency Investment Fund (LAIF), which is part of the Pooled Money Investment Account that is regulated by the California Government Code under the oversight of the State Treasurer, Director of Finance and State Controller. The City may invest up to $75 million in LAIF funds. Investments in LAIF are highly liquid, as deposits can be converted to cash within 24 hours without loss of interest. The balance available for withdrawal is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis. All investments with LAIF are secured by the full faith and credit of the State of California. Separate LAIF financial statements are available from the California State Treasurer’s Office on the Internet at http://www.treasurer.ca.gov.
The value of the City’s investment in this pool is based upon the City’s pro-rata share of the fair value provided by LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio). LAIF’s (and the City’s) exposure to risk (credit, market or legal) is not currently available.
Investment in California Asset Management Program Pool
The City is a voluntary participant in the California Asset Management Program (CAMP).
CAMP is an investment pool offered by the California Asset Management Trust (the Trust). The Trust is a joint powers authority and public agency created by the Declaration of Trust and established under the provisions of the California Joint Exercise of Powers Act (California Government Code Sections 6500 et seq., or the “Act”) for the purpose of exercising the common power of its Participants to invest certain proceeds of debt issues and surplus funds.
The Trust’s activities are directed by a Board of Trustees, all of whom are employees of the California public agencies which are participants in the Trust.
The Pool’s investments are limited to investments permitted by subdivision (a) to (n), inclusive, of Section 53601 of the California Government Code. The City reports investments in CAMP at the fair value amounts provided by CAMP, which is the same as the value of the pool share.
CAMP is not registered with the Securities and Exchange Commission.
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
-47-
2) CASH AND INVESTMENTS, (continued)
Fair Value Measurements
GASB Statement No. 72, Fair Value Measurements and Application, establishes a fair value hierarchy consists of three broad levels: Level 1 inputs consist of quoted prices (unadjusted) for identical assets and liabilities in active markets that a government can access at the measurement date, Level 2 inputs consist of inputs other than quoted prices that are observable for an asset or liability, either directly or indirectly, that can include quoted prices for similar assets or liabilities in active or inactive markets, or market-corroborated inputs, and Level 3 inputs have the lowest priority and consist of unobservable inputs for an asset or liability. The valuation method used for rental properties is the Leased Fee Market method, which is dependent on the income generated from the rental properties.
The following table presents the balances of the assets measured at fair value on a recurring basis of June 30, 2021.
Total Level 1 Level 2 Level 3
Federal Agency Securities 25,510,012 $ - $ 25,510,012$ - $ U.S. Treasury Obligations 19,125,840 - 19,125,840 - U.S. Corporate 13,637,494 - 13,637,494 - Municipal Obligations 791,295 - 791,295 - Asset-Backed Securities 4,392,512 - 4,392,512 - Collateralized Mortgage Obligations 1,695,002 - 1,695,002 - Held by bond trustees:
U.S. Treasury Obligations 991,447 - 991,447 - Real Estate 149,035,000 - - 149,035,000 Total Investments by Fair Value Level 215,178,602 - $ 66,143,602$ 149,035,000 $ Not subject to the fair value hierarchy:
LAIF 41,299,220
CAMP 41,761,465
Money Market Mutual Funds 3,284,534
Held by bond trustees:
Money Market Mutual Funds 61,463,078
Total 362,986,899 $
Investments by Fair Value Level
Fair Value Measurement Using
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
-48-
3) NOTES RECEIVABLE
At June 30, 2021, notes receivable consisted of the following:
9,569,563$
1,066,943
163,865,749
1,832,267
The City and former City of San Marcos Redevelopment Agency made several loans to various housing developers for the acquisition, construction or rehabilitation of low and moderate housing. Upon the dissolution of the Redevelopment Agency, these loans were transferred to the City’s affordable housing program. The loans were made in fiscal years 1997 through 2011 at various amounts and at interest rates ranging from 0.25% to 5.9% per annum. Principal and interest are due at various maturity dates but no later than 55 years from the date of the note. Due to the long-term nature of the loans, unavailable revenue has been recorded in the Affordable Housing Special Revenue Fund.
In June 2001, the City loaned $1,320,000 to a developer for the acquisition, development and construction of a commercial pad. The loan has a term of thirty years and bears an interest rate of 3%.
Payments from residual receipts, if any, are to be made on an annual basis beginning with May 15 of the year first following the date the project is completed. Due to the long-term nature of the loan, unavailable revenue has been recorded in the Affordable Housing Special Revenue Fund. The balance at June 30, 2021 includes accrued interest of $512,267
The City of San Marcos affordable housing program has made various loans to individuals to acquire and own property within mobile home parks. These loans are at various low simple interest rates.
Principal and interest are due in 30 years from the date of the note unless the property is sold or the individual no longer qualifies under low or moderate income requirements. Due to the long-term nature of the loans, unavailable revenue has been recorded in the Affordable Housing Special Revenue Fund.
The City loaned $8,672,500 to AOA San Marcos LLC for construction financing of a mixed use complex. The loan is payable in full in June, 2024 and bears an interest rate of 5.25% per annum. Due to the long- term nature of the loan, unavailable revenue has been recorded in the General Fund. The balance at June 30, 2021 includes accrued interest of $897,063.
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
-49-
3) NOTES RECEIVABLE, (continued)
807,722$
2,497,116
2,241,304
672,474
182,553,138$ Total notes receivable
The City made two loans for a total amount of $1,845,625 to ALFA to assist with the development of a 100-unit affordable rental housing project. The loan is payable in full on June 1, 2040 and bears an interest rate of 3%. Due to the long-term nature of the loan, unavailable revenue has been recorded in the Affordable Housing Special Revenue Fund. The balance at June, 30, 2021 includes accrued interest of $651,491.
The City has provided loans to several individuals under a Federal (HOME) and a State (CalHOME) mortgage assistance loan
programs. The loans are to be repaid in 30 years and bear an interest rate of 3%. Due to the long-term nature of these loans, unavailable revenue has been recorded in the HOME Grant and the CalHOME Grant Special Revenue Funds.
In December 2004, the City loaned $700,000 to Assisted Living Foundation of America (ALFA), a non-profit corporation, to assist with the development of a 120-unit senior housing project. The loan is payable in full on June 1, 2038 and bears an interest rate of 1%. Due to the long-term nature of the loan, unavailable has been recorded in the Affordable Housing Special Revenue Fund. The balance at June 30, 2021 includes accrued interest of $107,722.
The former City of San Marcos Redevelopment Agency provided loans to individuals under a mortgage assistance program. The loans a r et ob er e p a i di n3 0y e a r sa n db e a ra ni n t e r e s to f3 % . U p o nt h e dissolution of the Redevelopment Agency, these loans were transferred to the City’s affordable housing program. Due to the long- term nature of the loans, unavailable revenue has been recorded in the Affordable Housing Special Revenue Fund.
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
-50-
4) OTHER RECEIVABLES
At June 30, 2021, other receivables consisted of the following:
$ 120,516
1,099,547
779,525
$ 1,999,588
The City has entered into an agreement with a property owner whereby certain public facilities fees are being deferred. The revenue has been deferred in the governmental funds.
Total other receivables – governmental funds
Other miscellaneous receivables
In March 2020, the City set aside up to $3,000,000 of the City's General Fund Reserves for a short term business loan program. This program was created in response to the significant negative impact the Covid-19 emergency situation caused the City's local business community.
Governmental Funds:
Proprietary Funds:
$ 661,139
In June 2004, the City entered into a Release and Settlement Agreement with a contractor whereby $974,652 is to be remitted to the City over the next fifty years as compensation for the loss of lease space. Payments of $1,624 are to be made on the fifteenth day of each month beginning on or about June 15, 2005 through May 15, 2055.
5) INTERFUND RECEIVABLES AND TRANSFERS
Short term loans between funds (Due to/Due from) were as follows at June 30, 2021:
Amount
San Marcos Affordable Housing General Fund 427,500 $
General Fund Non-Major Governmental Funds 267,661
695,161$
Receivable Fund Payable Fund
The loans from the General Fund to the Non-Major Governmental Funds were made to eliminate short-term cash deficits.
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
-51-
5) INTERFUND RECEIVABLES AND TRANSFERS, (continued)
Long term loans between funds (Advances to/Advances from) were as follows at June 30, 2021:
Amount
San Marcos Affordable Housing General Fund 1,843,576$
Receivable Fund Payable Fund
The loan from the San Marcos Affordable Housing Fund to the General Fund was made for the purchase of a proportional share of the Next Generation Regional Communications System (NextGen RCS), which provides public safety and public service radio communications to San Diego and Imperial Counties.
Interfund transfers were as follows:
San Marcos Non-Major Total
General Affordable Capital Governmental Transfers
Fund Housing Improvements Funds Out
Transfers Out:
General Fund - $ 142,500$ 1,055,828 $ 868,487 $ 2,066,815 $ Creekside Marketplace
Enterprise Fund 3,400,000 - - - 3,400,000 Non-major Governmental
Funds 707,198 - 11,341,170 - 12,048,368 Total Transfers In: 4,107,198$ 142,500 $ 12,396,998$ 868,487 $ 17,515,183$ Transfers In
All of the transfers were made as budgeted. The transfer of $3,400,000 was transferred from the Creekside Marketplace Enterprise Fund to the General Fund to fund operations. $1,055,828 from the General Fund to the Capital Improvements Fund was to fund Capital Improvement projects. $868,487 from General Fund to the Non-Major Governmental Funds was for operational activities. The $11,341,170 transfers from the Non-Major Governmental Funds to the Capital Improvements Fund were also to fund the CIP projects. Of the $707,198 transfers from the Non-Major Governmental Funds to the General Fund, $695,156 was transferred to fund lighting and landscaping costs.
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
-52-
6) UNAVAILABLE/UNEARNED REVENUE
Governmental funds report unavailable revenue in connection with receivables for revenues that are not considered to be available to liquidate liabilities of the current period. Governmental funds also defer revenue recognition in connection with resources that have been received, but not yet earned. At the end of the current fiscal year, the various components of unavailable revenue and unearned revenue reported in the governmental funds were as follows:
Unavailable Unearned
Revenue Revenue Total
Revenue received prior to recognition
period - $ 761,919$ 761,919 $
Revenue received from developers
prior to earning - 2,251,474 2,251,474 Revenues earned but not available
within 60 days after the close of
the fiscal year 713,220 - 713,220 Fees receivable from property owners
under various agreements 649,401 - 649,401 Long-term loans to mobile home
owners 1,066,942 - 1,066,942
Long-term loans to individuals under
under a mortgage assistance program 2,929,778 - 2,929,778 Long-term loans to developers for
the acquisition, construction or
rehabilitation of affordable housing 177,497,200 - 177,497,200 Long-term loan to a developer for
the acquisition, development and
construction of a commercial pad 1,832,267 - 1,832,267 Total unavailable/unearned revenue
for governmental funds 184,688,808 $ 3,013,393 $ 187,702,201 $
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
-53-
7) CAPITAL ASSETS
Capital asset activity was as follows for the year ended June 30, 2021:
Governmental Activities: Balance Balance
June 30, 2020* Additions Deletions June 30, 2021
Capital assets, not depreciated:
Land 240,502,972$ - $ (2,501,651)$ 238,001,321 $ Land improvements 66,503,047 368,016 - 66,871,063 Construction in progress 44,376,976 27,125,959 (3,700,619) 67,802,316 Total capital assets, not
depreciated 351,382,995 27,493,975 (6,202,270) 372,674,700 Capital assets, being depreciated:
Buildings 73,256,572 - - 73,256,572 Furniture and equipment 22,159,420 2,271,520 (542,546) 23,888,394 Infrastructure 387,191,253 1,047,491 - 388,238,744 Total capital assets, being depreciated 482,607,245 3,319,011 (542,546) 485,383,710 Less accumulated depreciation for:
Buildings (32,901,640) (1,465,131) - (34,366,771) Furniture and equipment (15,351,131) (1,779,076) 542,546 (16,587,661) Infrastructure (199,048,210) (11,494,309) - (210,542,519) Total accumulated depreciation (247,300,981) (14,738,516) 542,546 (261,496,951) Total capital assets, being
depreciated, net 235,306,264 (11,419,505) - 223,886,759 Total governmental activities $ 586,689,259 $ 16,074,470 $ (6,202,270) $ 596,561,459
*Includes restatement of land sale in previous fiscal year. See Note 21 for details.
Current year deletions to construction in progress include $2,524,861 in additions to furniture and equipment, $1,047,491 in additions to infrastructure, and $128,267 in project costs deemed not viable during the planning and design phase of the project.
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
-54-
7) CAPITAL ASSETS, (continued)
Depreciation expense was charged to functions/programs of the primary government as follows:
Governmental Activities:
General government $ 1,010,296
Public safety 1,599,044
Highways, streets and parks 12,001,676
Culture and recreation 127,500
Total depreciation expense – governmental activities $ 14,738,516
Assets acquired through capital leases are as follows:
Equipment $ 3,411,238
Less: Accumulated depreciation (405,577)
Total $ 3,005,661
8) LONG-TERM LIABILITIES
The following is a summary of changes in long-term liabilities for Governmental Activities for the year ended June 30, 2021:
Balance Balance Due Within
June 30, 2020 Additions Deletions June 30, 2021 One Year Governmental Activities:
Long-term debt
Direct borrowing:
Loans payable $ 777,055 $ - (168,302) $ 608,753 $ 91,106 $ Safety center private placement
financing 2,905,000 - (320,000) 2,585,000 335,000 Subtotal long-term debt 3,682,055 - (488,302) 3,193,753 426,106 Other long-term liabilities
Compensated absences 4,874,760 2,953,991 (2,907,246) 4,921,505 3,048,295 Claims payable 1,686,697 349,142 (577,977) 1,457,862 600,000 Capital leases payable 2,413,785 585,414 (623,028) 2,376,171 616,492 Subtotal other long-term 8,975,242 3,888,547 (4,108,251) 8,755,538 4,264,787 liabilities
Total long-term liabilities 12,657,297$ 3,888,547 $ (4,596,553) $ 11,949,291 $ 4,690,893 $
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
-55-
8) LONG-TERM LIABILITIES, (continued)
The entire net pension and net OPEB liabilities are reported as a noncurrent liabilities in the accompanying Statement of Net Position in accordance with GASB Statement Nos. 68 and 75, respectively. Net pension and net OPEB liabilities are generally liquidated by the City’s General Fund. See notes 11 and 12, respectively, for more information.
Loans Payable - Direct Borrowing
608,753$
608,753$
In March 2014, the City entered into a loan agreement with the California Energy Resources Conservation and Development Commission (the Energy Commission) for a preliminarily approved amount of $1,100,000, at an annual interest rate of 1.0%. The loan is for an energy savings project consisting of retrofitting 2,000 LED streetlight fixtures throughout the City.
The City receives the loan proceeds on a cost reimbursement basis. The project was completed, and the amount of the loan was finalized on May 3, 2016 at $1,049,332. The semi-annual loan repayments of $48,484 from the Community Facilities District 98-02 and the Street Light District Special Revenue Funds are due each December 22 and June 22 through year 2027. In the event annual cost savings fail to equal or exceed the amount due under the loan agreement, the agreement may be renegotiated to assure that the repayment amount does not exceed the actual energy savings or avoided costs resulting from the project.
Total loans payable
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
-56-
8) LONG-TERM LIABILITIES, (continued)
Loans Payable - Direct Borrowing, (continued)
The annual requirements to amortize the loans payable are as follows:
Year Ending
June 30, Principal Interest Total
2022 91,106$ 5,861 $ 96,967 $
2023 92,020 4,948 96,968
2024 92,931 4,035 96,966
2025 93,874 3,094 96,968
2026 94,815 2,152 96,967
2027-2028 144,007 1,444 145,451
Total 608,753$ 21,534 $ 630,287 $
Safety Center Private Placement Financing – Direct Borrowing
$ 2,585,000
In November 2017, the San Marcos Public Financing Authority entered into a private placement financing agreement in the amount of $3,535,000 to refund the San Marcos Public Facilities Authority 2006 Lease Revenue Refunding Bonds for the constuction of a safety center.
The interest and principal are due semi-annually on May 1 and November 1 commencing May 1, 2018 at interest rate of 2.37%.
Payments due are funded by the revenues generated from the use of the safety center from various entities. The reserve requirement was fully funded at the end of the fiscal year.
Debt service requirements to maturity are as follows:
2022 335,000$ 61,265 $ 396,265 $
2023 340,000 53,325 393,325
2024 345,000 45,267 390,267
2025 350,000 37,091 387,091
2026 360,000 28,795 388,795
2027-2029 855,000 34,245 889,245
Total 2,585,000$ 259,988 $ 2,844,988 $
Principal Interest Total
Year Ending
June 30,
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
-57-
8) LONG-TERM LIABILITIES, (continued)
Compensated Absences
GASB Statement No. 16 identifies certain items t hat should be accrued as a liability as the benefits are earned by the employees but only to the extent it is probable that the employer will compensate the employees for the benefits through cash payments conditioned on the employee’s termination or retirement.
City employees accumulate earned but unused benefits that can be converted to cash at termination of employment. The accrued liability for these vested benefits, payable in accordance with various collective bargaining agreements, totals $4,921,505 as of June 30, 2021.
Claims Payable
Claim and judgment liabilities are reported when it is probable that a loss has occurred and the amount of the loss can be reasonably estimated. The City records the estimated loss, net of any insurance coverage under its self-insurance program (See note 13). The amount outstanding as of June 30, 2021 was $1,457,862.
Capital Leases Payable
Future lease payments under the capital lease are as follows:
Year Ending June 30, Amount
2022 684,198$
2023 617,591
2024 468,039
2025 319,486
2026 472,701
Total minimum lease payments 2,562,015
Less amount representing interest (185,844)
Net present value of minimum lease payments 2,376,171$
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
-58-
9) FUND BALANCE CLASSIFICATIONS
Fund balance for governmental funds are classified as (1) nonspendable, (2) restricted, (3) assigned, or (4) unassigned. The details of the governmental fund balances as of June 30, 2021 are presented below:
Total
San Marcos Non-Major
Affordable Capital Governmental
General Housing Improvements Funds Total
Fund Balances:
Nonspendable:
Land held for resale 440,594 $ - $ - $ - $ 440,594$ Deposits 822,138 - - - 822,138 Investments in real estate 53,425,000 - - - 53,425,000 Investment in joint venture 7,225,974 - - - 7,225,974 Subtotal 61,913,706 - - - 61,913,706 Restricted for:
Affordable housing - 40,945,345 - - 40,945,345 Transportation - - - 9,618,767 9,618,767 Lighting and landscape - - - 16,803,292 16,803,292 Pension trust 2,889,350 - - - 2,889,350 Capital improvements - - - 1,005,625 1,005,625 Public facilities - - - 37,788,031 37,788,031 Other purposes - - - 3,681,318 3,681,318 Subtotal 2,889,350 40,945,345 - 68,897,033 112,731,728 Assigned to:
Vehicle & equipment acquisition/
replacement 2,337,250 - - - 2,337,250 City facilities replacement/
rehabilitation 4,832,187 - - - 4,832,187 City infrastructure replacement/
rehabilitation 4,695,193 - - - 4,695,193 Subtotal 11,864,630 - - - 11,864,630 Unassigned (deficit) 40,069,078 - (11,103,204) (281,842) 28,684,032 Total 116,736,764 $ 40,945,345 $ (11,103,204) $ 68,615,191 $ 215,194,096 $
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
-59-
10) NET POSITION CLASSIFICATIONS
Net position for governmental activities and business-type activities is classified as (1) net investment in capital assets, (2) restricted, or (3) unrestricted. The details of the net position as of June 30, 2021 are presented below:
Permanent
Fund
Governmental Business-Type Community
Activities Activities Total Foundation
Net Investment in Capital Assets:
Capital assets, net of accumulated
depreciation 596,561,459 $ - $ 596,561,459$ - $ Loss on defeasance of debt 46,787 - 46,787 - Less capital related debt balances:
Private placement financing (2,585,000) - (2,585,000) - Capital leases payable (2,376,171) - (2,376,171) - Loans payable (608,753) - (608,753) - Total Net Investment in Capital Assets 591,038,322 - 591,038,322 - Restricted for:
Permanent fund - not expendable - - - 1,000,000 Permanent fund - expendable - - - 475,316 Affordable housing 222,040,542 - 222,040,542 - Transportation 9,620,212 - 9,620,212 - Lighting and landscape 16,822,490 - 16,822,490 - Pension trust 2,889,350 - 2,889,350 - Capital improvements 1,005,625 - 1,005,625 - Public facilities 37,924,921 - 37,924,921 - Other purposes 3,681,318 - 3,681,318 - Total Restricted 293,984,458 - 293,984,458 1,475,316 Unrestricted 35,934,735 97,147,813 133,082,548 - Total 920,957,515 $ 97,147,813 $ 1,018,105,328$ 1,475,316 $
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
-60-
11) RETIREMENT PLAN
A) General Information about the Pension Plans
Plan Descriptions
The Plans consist of an agent multiple-employer defined benefit pension plan and a public agency cost-sharing multiple-employer defined benefit pension plan administered by the California Public Employees’ Retirement System (CalPERS).
Miscellaneous – Agent, Multiple-Employer Defined Benefit Pension Plan
The Plan is an agent multiple-employer defined benefit pension plan administered by the California Public Employees’ Retirement S ystem (CalPERS). A full description of the pension plan regarding number of employees covered, benefit provisions, assumptions (for funding, but not accounting purposes), and membership information are listed in the plan’s June 30, 2019 Annual Actuarial Valuation Report (funding valuation). Details of the benefits provided can be obtained in Appendix B of the actuarial valuation report. This report and CalPERS’ audited financial statements are publicly available reports that can be obtained at CalPERS’ website, at www.calpers.ca.gov.
Safety – Cost Sharing, Multiple-Employer Defined Benefit Pension Plan
All qualified permanent and probationary employees ar e eligible to participate in the Public Agency Cost-Sharing Multiple-Employer Defined Benefit Pension Plan (Plan) administered by the California Public Employees’ Retirem ent System (CalPERS.) The Plan consists of individual rate plans (benefit tiers) within a safety risk pool (police and fire) and a miscellaneous risk pool (all other). Plan assets may be used to pay benefits for any employer rate plan of the safety and miscellaneous pools. Accordingly, rate plans within the safety or miscellaneous pools are not separate plans under GASB Statement No. 68.
Individual employers may sponsor more than one rate plan in the miscellaneous or safety risk pools. The City sponsors four rate plans (one miscellaneous and three safety). 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 plan regarding benefit provisions, assumptions and membership information that can be found on the CalPERS’ website, at www.calpers.ca.gov.
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 5 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.
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
-61-
11) RETIREMENT PLAN, (continued)
A) General Information about the Pension Plans, (continued)
Benefits Provided, (continued)
The Plan operates under the provisions of the California Public Employees’ Retirement Law (PERL), the California Public Employees’ Pension Reform Act of 2013 (PEPRA), and the regulations, procedures and policies adopted by the CalPERS Board of Administration. The Plan’s authority to establish and amend the benefit terms are set by the PERL and PEPRA, and may be amended by the California state legislature and in some cases require approval by the CalPERS Board.
The Plans’ provisions and benefits in effect at June 30, 2021, are summarized as follows:
On or After May 15, 2012 On or After
Hire date Prior to May 15, 2012 Prior to January 1, 2013 January 1, 2013 Benefit formula 2.7% @ 55 2.0% @ 55 2.0% @ 62
Benefit vesting schedule 5 years service 5 years service 5 years of 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% 1.4% to 2.4% 1.0% to 2.5% Required employee contribution rates 8.00% 7.00% 6.50%
Required employer contribution rates 12.022% 12.022% 12.022% On or After May 15, 2012 On or After
Hire date Prior to May 15, 2012 Prior to January 1, 2013 January 1, 2013 Benefit formula 3.0% @ 50 3.0% @ 55 2.7% @ 57
Benefit vesting schedule 5 years service 5 years service 5 years of service Benefit payments monthly for life monthly for life monthly for life Retirement age 50 50 - 55 50 - 57
Monthly benefits, as a % of eligible compensation 3.0% 2.4% to 3.0% 2.0% to 2.7% Required employee contribution rates 9.00% 9.00% 12.75% Required employer contribution rates 25.540% 22.397% 13.884% Miscellaneous Plan
Safety Plan
Employees Covered
At June 30, 2019 (valuation date), the following employees were covered by the benefit terms:
Miscellaneous Plan
Inactive employees or beneficiaries
currently receiving benefits 198
Inactive employees entitled to but
not yet receiving benefits 307
Active employees 192
Total 697
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
-62-
11) RETIREMENT PLAN, (continued)
A) General Information about the Pension Plans, (continued)
Contributions
Section 20814(c) of the California Public Employees’ Retirement Law (PERL) requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate.
The total plan contributions are determined through CalPERS’ annual actuarial valuation process.
Miscellaneous – Agent, Multiple-Employer Defined Benefit Pension Plan
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 employer is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. Employer contribution rates may change if plan contracts are amended. Payments made by the employer to satisfy contribution requirements that are identified by the pension plan terms as plan member contribution requirements ar e classified as plan member contributions.
Employer Contributions to the Plan for the fiscal year ended June 30, 2021 were $6,321,721.
Safety – Cost Sharing, Multiple-Employer Defined Benefit Pension Plan
For public agency cost-sharing plans covered by either the Miscellaneous or Safety risk pools, the Plan’s actuarially determined rate is based on the estimated amount necessary to pay the Plan’s allocated share of the risk pool’s costs of benefits earned by employees during the year, and any unfunded accrued liability. The employer is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. Employer contribution rates may change if plan contracts are amended.
Payments made by the employer to satisfy cont ribution requirements that are identified by the pension plan terms as plan member contribution requirements are classified as plan member contributions. Employer Contributions to the Plan for the fiscal year ended June 30, 2021 were $2,878,444. The actual employer payments of $2,639,604 made to CalPERS by the City during the measurement period ended June 30, 2020 differed from the City’s proportionate share of the employer’s contributions of $3,318,811 by $679,207, which is being amortized over the expected average remaining service lifetime in the Public Agency Cost-Sharing Multiple Employer Plan.
B) Net Pension Liability
The City’s net pension liability for the 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, 2020, using an annual actuarial valuation as of June 30, 2019 rolled forward to June 30, 2020 using standard update procedures. A summary of principal assumptions and methods used to determine the net pension liability is as follows.
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
-63-
11) RETIREMENT PLAN, (continued)
B) Net Pension Liability, (continued)
Actuarial Methods and Assumptions Used to Determine Total Pension Liability
Valuation Date June 30, 2019
Measurement Date June 30, 2020
Actuarial Cost Method Entry Age Normal
Asset Valuation Method: Market Value of Assets
Actuarial Assumptions:
Discount Rate 7.15%
Inflation 2.50%
Salary Increase Varies by entry age and service
Mortality Rate Table
(1) Derived using CalPERS' membership
data for all funds
Post Retirement Benefit Increase
The lesser of contract COLA up to 2.50%
until Purchasing Power Protection
Allowance Floor on Purchasing Power
applies, 2.50% thereafter
(1) The mortality table used was developed based on CalPERS' specific data. The probabilities of mortality are based on the 2017 CalPERS Experience Study for the period from 1997 to 2015. Pre-retirement and Post-retirement mortality rates include 15 years of projected mortality improvement using 90% of scale MP-2016 published by the Society of Actuaries. For more details on this table, pl ease refer to the CalPERS Experience Study and Review of Actuarial Assumptions report from December 2017 that can be found on the CalPERS website.
All other actuarial assumptions used in the June 30, 2019 valuation were based on the results of an actuarial experience study for the period from 1997 to 2015, including updates to salary increase, mortality and retirement rates. The Experience Study report can be obtained at CalPERS’ website, at www.calpers.ca.gov.
Long-term Expected Rate of Return
The long-term expected rate of return on pension plan investments was determined using a building-block method in which expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class.
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
-64-
11) RETIREMENT PLAN, (continued)
B) Net Pension Liability, (continued)
Long-term Expected Rate of Return
In determining the long-term expected rate of return, CalPERS took into account both short- term and long-term market return expectations as well as the expected pension fund cash flows. Using historical returns of all the funds’ asset classes, expected compound (geometric) returns were calculated over the short-term (first 10 years) and the long-term (11+ years) using a building-block approach. Using the expected nominal returns for both short-term and long-term, the present value of benefits was calculated for each fund. The expected rate of return was set by calculating the rounded single equivalent expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and long-term returns. The expected rate of return was then set equal to the single equivalent rate calculated above and adjusted to account for assumed administrative expenses.
The expected real rates of return by asset class are as follows:
Asset Class1
Current Target
Allocation
Real Return
Years 1 - 102
Real Return
Year 11+3
Global equity 50% 4.80% 5.98%
Fixed income 28% 1.00% 2.62%
Inflation assets - 0.77% 1.81%
Private equity 8% 6.30% 7.23%
Real assets 13% 3.75% 4.93%
Liquidity 1% - (0.92%)
Total 100%
2 An expected inflation of 2% used for this period
3 An expected inflation of 2.92% used for this period
1In the System's ACFR, fixed income is included in global debt securities; liquidity is included in short-term investments; inflation assets are included in both global equity securities and global debt securities.
Change of Assumptions
The Plan adopted a new amortization policy effective with the 2019 actuarial valuation. The new amortization policy shortens the period over which actuarial gains and losses are amortized from 30 years to 20 years with the payments computed as a level dollar amount.
In addition, the new policy does not utilize a five-year ramp-up and ramp-down on UAL bases attributable to assumption changes and non-investment gains/losses. The new policy also does not utilize a five-year ramp-dow n on investment gains/losses. These changes apply only to new UAL bases established on or after June 30, 2019.
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
-65-
11) RETIREMENT PLAN, (continued)
B) Net Pension Liability, (continued)
Discount Rate
The discount rate used to measure the total pension liability for PERF C was 7.15%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member contribution rates and that contributions from employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, the Plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members.
Therefore, the long-term expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liability.
Pension Plan Fiduciary Net Position
Information about the pension plan’s assets, deferred outflows of resources, liabilities, deferred inflows of resources, and fiduciary net position are presented in CalPERS’ audited financial statements, which are publicly available reports that can be obtained at CalPERS’ website, at www.calpers.ca.gov. The plan ’s fiduciary net position and additions to/deductions from the plan’s fiduciary net position have been determined on the same basis used by the pension plan, which is t he economic resources measurement focus and the accrual basis of accounting. Benefits and refunds are recognized when due and payable in accordance with the terms of the plan. Investments are reported at fair value.
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
-66-
11) RETIREMENT PLAN, (continued)
C) Changes in Net Pension Liability
Miscellaneous – Agent, Multiple-Employer Defined Benefit Pension Plan
The following table shows the Plan’s change in net pension liability over the measurement period.
Total Pension
Liability
(a)
Plan Fiduciary Net
Position
(b)
Net Pension
Liability/(Asset)
(c) = (a) - (b)
Balance at: 6/30/2019 (VD) 145,630,949$ 102,129,098 $ 43,501,851 $ Changes Recognized for the
Measurement Period:
• Service Cost 2,703,721 - 2,703,721 • Interest on the Total
Pension Liability 10,335,678 - 10,335,678 • Differences between
Expected and Actual
Experience 1,290,024 - 1,290,024 • Contributions from
Employers - 5,080,583 (5,080,583) • Contributions from
Employees - 1,102,880 (1,102,880) • Net Investment Income - 5,149,684 (5,149,684) • Benefit Payments,
including Refunds of
Employee Contributions (7,435,808) (7,435,808) - • Administrative Expense - (143,977) 143,977 Net Changes during 2019-20 6,893,615 3,753,362 3,140,253 Balance at: 6/30/2020 (MD) 152,524,564$ 105,882,460 $ 46,642,104 $ Increase (Decrease)
Valuation Date (VD), Measurement Date (MD).
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
-67-
11) RETIREMENT PLAN, (continued)
C) Changes in Net Pension Liability, (continued)
Safety – Cost Sharing, Multiple-Employer Defined Benefit Pension Plan
The following table shows the cost sharing, multiple-employer Plans’ proportionate share of the net pension liability over the measurement period.
Plan Total Pension
Liability
(a)
Plan Fiduciary Net
Position
(b)
Plan Net Pension Liability
(c) = (a) - (b)
Balance at: 6/30/2019 (VD) 80,601,541$ 61,079,670 $ 19,521,871 $ Balance at: 6/30/2020 (MD) 85,891,165 64,118,116 21,773,049 Net changes during 2019-20 5,289,624$ 3,038,446 $ 2,251,178 $ Increase (Decrease)
Valuation Date (VD), Measurement Date (MD).
The City’s net pension liability for each of the cost sharing, multiple-employer Plans is measured as the proportionate share of the net pension liability. The net pension liability of each of the Plans is measured as of June 30, 2020, and the total pension liability for each Plan used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2019 rolled forward to June 30, 2020 using standard update procedures. The City’s proportion of the net pension liability was determined by CalPERS using the output from the Actuarial Valuation System and the fiduciary net position, as provided in the CalPERS Public Agency Cost-Sharing Allocation Methodology Report, which is a publicly available report that can be obtained at Ca lPERS’ website at www.calpers.ca.gov. The City’s proportionate share of the net pension liability for the safety Plan as of June 30, 2019 and 2020 measurement dates was as follows:
Safety Plan
Proportion - June 30, 2019 0.31272%
Proportion - June 30, 2020 0.32681%
Change - Increase (Decrease) 0.01409%
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
-68-
11) RETIREMENT PLAN, (continued)
C) Changes in Net Pension Liability, (continued)
Sensitivity of the Net Pension Liability to Changes in the Discount Rate
The following presents the City’s proportionate share of the net pension liability of each Plan as of the measurement date, calculated using the discount rate of 7.15 percent, as well as what the net pension liability would be if it were calculated using a discount rate that is 1 percentage-point lower (6.15 percent) or 1 percentage-point higher (8.15 percent) than the current rate:
Discount Rate - 1%
(6.15%)
Current Discount
Rate (7.15%)
Discount Rate + 1%
(8.15%)
Miscellaneous Plans'
Net Pension Liability 67,021,885$ 46,642,104 $ 29,850,736 $ Safety Plans' Net
Pension Liability 33,437,388$ 21,773,049 $ 12,201,356 $
Subsequent Events
There were no subsequent events that would materially affect the results presented in this disclosure.
Amortization of Deferred Outflows and Deferred Inflows of Resources
Under GASB 68, gains and losses related to changes in total pension liability and fiduciary net position are recognized in pension expense systematically over time.
The first amortized amounts are recognized in pension expense for the year the gain or loss occurs. The remaining amounts are categorized as deferred outflows and deferred inflows of resources related to pensions and are to be recognized in future pension expense.
The amortization period differs depending on the source of the gain or loss:
Net difference between
projected and actual earnings
on pension plan investments
5 year straight-line amortization
All other amounts Straight-line amortization over the expected average remaining services lives (EARSL) of
all members that are provided with benefits
(active, inactive and retired) as of the beginning
of the measurement period
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
-69-
11) RETIREMENT PLAN, (continued)
C) Changes in Net Pension Liability, (continued)
Recognition of Gains and Losses
For the agent, multiple employer plan, the expected average remaining service lifetime (EARSL) is calculated by dividing the total future service years by the total number of plan participants (active, inactive, and retired). For the cost sharing, multiple employer plan, the EARSL is calculated by dividing the total future service years by the total number of plan participants (active, inactive, and retired) in the Public Agency Cost Sharing Multiple- Employer Plan (PERF C).
The EARSL for the Plan for the measurement date ending June 30, 2020 is 3.1 years, which was obtained by dividing the total service years of 2,112 (the sum of remaining service lifetimes of the active employees) by 690 (the total number of participants: active, inactive, and retired). Note that inactive employees and retirees have remaining service lifetimes equal to 0. Also note that total future service is based on the members’ probability of decrementing due to an event other than receiving a cash refund.
The EARSL for PERF C for the measurement period ending June 30, 2020 is 3.8 years, which was obtained by dividing the total service years of 548,581 (the sum of remaining service lifetimes of the active employees) by 145,663 (the total number of participants:
active, inactive, and retired). Note that inactive employees and retirees have remaining service lifetimes equal to 0. Also note that total future service is based on the members’ probability of decrementing due to an event other than receiving a cash refund.
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
-70-
11) RETIREMENT PLAN, (continued)
D) Pension Expense and Deferred Outflows and Deferred Inflows of Resources Related to Pensions
Miscellaneous – Agent, Multiple-Employer Defined Benefit Pension Plan
As of the start of the measurement period (July 1, 2019), the net pension liability was $43,501,851. For the measurement period ending June 30, 2020 (the measurement date), the City incurred a pension expense of $6,682,114 for the Plan. A complete breakdown of the pension expense is as follows:
Description Amount
Service Cost 2,703,721 $
Interest on Total Pension Liability 10,335,678
Recognized Changes of Assumptions (49,465)
Recognized Differences between Expected and Actual Experience 1,167,809 Employee Contributions (1,102,880)
Projected Earnings on Pension Plan Investments (7,246,316) Recognized Differences between Projected and Actual
Earnings on Plan Investments 729,590
Administrative Expense 143,977
Total Pension Expense 6,682,114 $
Safety – Cost Sharing, Multiple-Employer Defined Benefit Pension Plan
As of the start of the measurement period (July 1, 2019), the net pension liability for the safety plans is $19,521,871. For the measurement period ending June 30, 2020 (the measurement date), the City incurred a pension expense of $4,741,517 for the safety plan.
The aggregate amount of pension expenses for the Miscellaneous and Safety plans for the measurement period ending June 30, 2020 is $11,423,631.
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
-71-
11) RETIREMENT PLAN, (continued)
D) Pension Expense and Deferred Outflows and Deferred Inflows of Resources Related to Pensions, (continued)
As of June 30, 2021, the City has deferred outflows and deferred inflows of resources related to pensions as follows:
Deferred
Outflows of
Resources
Deferred
Inflows of
Resources
Deferred
Outflows of
Resources
Deferred
Inflows of
Resources
Differences between Expected and
Actual Experience 1,645,770 $ - $ 1,688,390$ - $ Changes of Assumptions - (58,323) - (72,526) Net Difference between Projected and
Actual Earnings on Pension Plan
Investments 830,918 - 473,220 - Change in Employer's Proportion - - 1,114,319 - Differences between the employer's
contributions and the employer's
proportionate share of contributions - - - (666,250) Pension Contributions Subsequent to
Measurement Date 6,321,721 - 2,878,444 - 8,798,409$ (58,323) $ 6,154,373 $ (738,776) $ Miscellaneous Safety
These amounts above are net of outflows and inflows recognized in the 2019-20 measurement period expense. The $6,321,721 and $2,878,444 reported as deferred outflows of resources related to the contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in upcoming fiscal year. Other amounts reported as deferred outflows and deferred inflows of resources related to pensions will be recognized in future pension expense as follows:
Fiscal Year
Ended
June 30, Miscellaneous Safety
2022 $ 714,752 812,690$
2023 732,270 913,947
2024 552,015 573,406
2025 419,328 237,110
2026 - -
Thereafter - -
Deferred Outflows/(Inflows) of
Resources, Net
E) Payable to the Pension Plan
The City reported a payable of $0 for the outstanding amount of contributions to the pension plan required for the year ended June 30, 2021.
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
-72-
11) RETIREMENT PLAN, (continued)
F) Defined Contribution Pension Plan
The City provides pension benefits for all of its part-time employees through a defined contribution plan. In a defined contribution plan, benefits depend solely on amounts contributed to the plan plus investment earnings. The plan is administered as part of the City’s 457 plan. All part-time employees are eligible to participate from the date of employment. Federal legislation requires contributions of at least 7.5% to a retirement plan, and the City Council has resolved to pay 1.9% for City employees of the required contribution. The City’s contributions for each employee (and interest earned by the accounts) are fully vested immediately.
For the year ended June 30, 2021, the City’s total payroll and covered payroll for part-time employees was $846,096. The City made employer contributions of $16,076 (1.9% of current covered payroll), and employees contributed $47,381 (5.6% of current covered payroll).
12) OTHER POSTEMPLOYMENT BENEFITS (OPEB)
A) General Information about the OPEB Plans
Plan Description
Safety – Single Employer Defined Benefit Plan
Effective January 12, 1999, the City of San Marcos City Council and the San Marcos Fire Protection District (SMFPD) Board of Directors authorized the merger of the City and SMFPD contracts for the California Public Em ployees’ Retirement System (CalPERS) for the Safety employees. For Safety retirees who retired before the merger, the City continues to contribute the amount necessary to pay the full cost of enrollment in the CalPERS Health Plan, including the enrollment of eligible fam ily members, as passed by resolution by the SMFPD Board of Directors on April 12, 1977. The surviving spouse of an eligible retiree who elected spouse coverage under CalPERS is eligible for the employer contribution upon the death of the retiree. For Safety retirees who retired after the merger, the City provides the minimum required employer contribution under the CalPERS Health Plan for eligible retirees and surviving spouses in receipt of a pension benefit from CalPERS. The surviving spouse of an eligible retiree who elected spouse coverage under CalPERS is eligible for the employer contribution upon the death of the retiree. The scheduled minimum required employer contributions for each eligible retiree under the CalPERS Health Plan are $139 per month in 2021.
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
-73-
12) OTHER POSTEMPLOYMENT BENEFITS (OPEB), (continued)
A) General Information about the OPEB Plans, (continued)
Plan Description, (continued)
Miscellaneous – Single Employer Defined Benefit Plan
For non-safety or Miscellaneous employees, the City offers retirees and eligible dependents to continue on the City’s miscellaneous employee health plan until they are eligible for Medicare benefits. Retirees may participate in the health plan at their own cost.
The City does not issue any financial report for the plans. A separate financial report is not prepared for the plans.
Employees Covered
As of the June 30, 2020 measurement date, the following current and former employees were covered by the benefit terms under the Plan:
Active employees 246
Inactive employees or beneficiaries currently receiving benefits 49 Inactive employees entitled to, but not yet receiving benefits 10 Total 305
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
-74-
12) OTHER POSTEMPLOYMENT BENEFITS (OPEB), (continued)
A) General Information about the OPEB Plans, (continued)
Contributions
The City pays the portion of the employer related health insurance premiums for the current retirees and their spouses/dependents on a pay-as-you-go basis (no prefunding). For fiscal year ended June 30, 2021, the City paid $266,812 for other postemployment benefits.
B) Total OPEB Liability
The City’s total OPEB liability was measur ed as of June 30, 2020 and the total OPEB liability used to calculate the total OPEB liability was determined by an actuarial valuation dated June 30, 2020 to determine the June 30, 2020 total OPEB liability, based on the following actuarial methods and assumptions:
Actuarial Assumptions June 30, 2020 Measurement Date
Actuarial Valuation Date June 30, 2020
Contribution Policy No pre-funding
Discount Rate 2.21% at June 30, 2020 (Bond Buyer 20-Bond Index)
3.50% at June 30, 2019 (Bond Buyer 20-Bond Index)
General Inflation 2.75% annually
Mortality, Retirement,
Disability, Termination
Based on CalPERS 1997-2015 Experience Study
Salary increases 3% annually
Medical Trend an ultimate rate of 4.00% in 2076
Medicare (Non-Kaiser) – 6.1% for 2022, decreasing to
an ultimate rate of 4.00% in 2076
Medicare (Kaiser) – 5.0% for 2022, decreasing to an
Healthcare Participation
Current Actives:
Miscellaneous - 70%
Safety - 60%
Current Retirees:
100% if covered, 5% re-elect PEMHCA at 65, if waived
Discount Rate
A discount rate of 2.21 percent was used in the valuation for measurement date June 30, 2020.
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
-75-
12) OTHER POSTEMPLOYMENT BENEFITS (OPEB), (continued)
B) Total OPEB Liability, (continued)
Changes in the Total OPEB Liability
The changes in the total OPEB liability for the Plan are as follows:
Total OPEB
Liability
Balance at June 30, 2020
(6/30/19 measurement date) 7,467,130 $
Changes recognized for the measurement period:
Service cost 454,666
Interest 272,594
Differences between expected and
actual experience 407,944
Changes of assumptions 1,451,482
Benefit payments (266,812)
Net changes 2,319,874
Balance at June 30, 2021
(6/30/20 measurement date) 9,787,004$
Sensitivity of the total OPEB Liability to Changes in the Discount Rate
The following presents the total OPEB liability of the City if it were calculated using a discount rate that is one percentage point lower or one percentage point higher than the current rate, for measurement period ended June 30, 2020:
1% Decrease
(1.21%)
Current Discount
Rate (2.21%)
1% Increase
(3.21%)
Total OPEB Liability 11,330,286$ 9,787,004 $ 8,551,693 $
Sensitivity of the Total OPEB Liability to Changes in the Health Care Cost Trend Rates
The following presents the total OPEB liability of the City if it were calculated using health care cost trend rates that are one percentage point lower or one percentage point higher than the current rate, for measurement period ended June 30, 2020:
1% Decrease
Current Healthcare
Cost Trend Rates 1% Increase
Total OPEB Liability 8,296,100$ 9,787,004 $ 11,719,072 $ City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
-76-
12) OTHER POSTEMPLOYMENT BENEFITS (OPEB), (continued)
B) Total OPEB Liability, (continued)
OPEB Plan Fiduciary Net Position
As the City is not prefunding with an OPEB trust, Plan Fiduciary Net Position was $0 at the June 30, 2020 measurement date. The City does not have assets accumulated in a trust that meets the criteria of GASB 75 to pay related benefits.
Recognition of Deferred Outflows and Deferred Inflows of Resources
Gains and losses related to changes in total OPEB liability and fiduciary net position are recognized in OPEB expense systematically over time. Amounts are first recognized in OPEB expense for the year the gain or loss occurs. The remaining amounts are categorized as deferred outflows and deferred inflows of resources related to OPEB and are to be recognized in future OPEB expense. The net difference between projected and actual earnings on OPEB plan investments is amortized using the straight-line method over 5 years, while all other amounts are amortized over the expected average remaining service lifetime (EARSL) of plan participants.
OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB
For the fiscal year ended June 30, 2021, th e City recognized OPEB expense of $664,035.
As of fiscal year ended June 30, 2021, the City reported deferred outflows of resources related to OPEB from the following sources:
Deferred Outflows
of Resources
Deferred Inflows
of Resources
Changes between expected and actual experience $ 364,546 $ (1,246,069) Changes of assumptions 1,575,209 (520,526)
Contributions to OPEB plan subsequent to the measurement date 301,777 - Total 2,241,532 $ (1,766,595) $
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
-77-
12) OTHER POSTEMPLOYMENT BENEFITS (OPEB), (continued)
B) Net OPEB Liability, (continued)
OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB, (continued)
The $301,777 reported as deferred outflows of resources related to contributions subsequent to the June 30, 2020 measurement date will be recognized as a reduction of the total OPEB liability during the fiscal year ending June 30, 2021. Other amounts reported as deferred outflows or inflows of resources related to OPEB will be recognized as expense as follows:
Fiscal Year Ended
June 30
Deferred
Outflows/(Inflows)
of Resources
2022 (63,955) $
2023 (63,955)
2024 (63,955)
2025 (63,955)
2026 (14,955)
Thereafter 443,935
13) INSURANCE
A) California Joint Powers Insurance Authority
(1) Description of Self-Insurance Pool Pursuant the Joint Powers Agreement
The City of San Marcos is a member of the California Joint Powers Insurance Authority (Authority). The Authority is composed of 123 California public entities and is organized under a joint powers agreement pursuant to California Government Code §6500 et seq.
The purpose of the Authority is to arrange and administer programs for the pooling of self- insured losses, to purchase excess insurance or reinsurance, and to arrange for group purchased insurance for property and other lines of coverage. The California JPIA began covering claims of its members in 1978. Each member government has an elected official as its representative on the Board of Directors. The Board operates through a nine- member Executive Committee.
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
-78-
13) INSURANCE, (continued)
A) California Joint Powers Insurance Authority, (continued)
(2) Self-Insurance Programs of the Authority
Each member pays an annual contribution at the beginning of the coverage period. A retrospective adjustment is then conducted annually thereafter, for coverage years 2012- 13 and prior. Coverage years 2013-14 and forward are not subject to routine annual retrospective adjustment. The total funding requirement for primary self-insurance programs is based on an actuarial analysis. Costs are allocated to individual agencies based on payroll and claims history, relative to other members of the risk-sharing pool.
Primary Liability Program
Claims are pooled separately between police and general government exposures. (1) The payroll of each member is evaluated relative to the payroll of other members. A variable credibility factor is determined for each member, which establishes the weight applied to payroll and the weight applied to losses within the formula. (2) The first layer of losses includes incurred costs up to $100,000 for each occurrence and is evaluated as a percentage of the pool’s total incurred costs within the first layer. (3) The second layer of losses includes incurred costs from $100,000 to $500,000 for each occurrence and is evaluated as a percentage of the pool’s total incurred costs within the second layer. (4) Incurred costs from $500,000 to $50 million, are distributed based on the outcome of cost allocation within the first and second loss layers.
The overall coverage limit for each member, including all layers of coverage, is $50 million per occurrence. Subsidence losses have a sub-limit of $50 million per occurrence. The coverage structure includes retained risk that is pooled among members, reinsurance, and excess insurance. More detailed information about the various layers of coverage is available on the following website: https://cjpia.org/coverage/risk-sharing-pools/.
(3) Purchased Insurance
Pollution Legal Liability Insurance
The City of San Marcos participates in the pollution legal liability insurance program which is available through the Authority. The policy covers sudden and gradual pollution of scheduled property, streets, and storm drains owned by the City of San Marcos. Coverage is on a claims-made basis. There is a $250,000 deductible. The Authority has an aggregate limit of $20 million.
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
-79-
13) INSURANCE, (continued)
A) California Joint Powers Insurance Authority, (continued)
(3) Purchased Insurance, (continued)
Property Insurance
The City of San Marcos participates in the all-risk property protection program of the Authority. This insurance protection is under written by several insurance companies. City of San Marcos property is currently insured according to a schedule of covered property submitted by the City of San Marcos to the Authority. City of San Marcos property currently has all-risk property insurance protection in the amount of $186,700,908. There is a $10,000 deductible per occurrence except for non-emergency vehicle insurance which has a $2,500 deductible.
Earthquake and Flood Insurance
The City of San Marcos purchases earthquake and flood insurance on a portion of its property. The earthquake insurance is part of the property protection insurance program of the Authority. City of San Marcos property currently has earthquake protection in the amount of $154,611,944. There is a deductible of 5% per unit of value with a minimum deductible of $100,000.
Crime Insurance
The City of San Marcos purchases crime insurance coverage in the amount of $1,000,000 with a $2,500 deductible. The fidelity coverage is provided through the Authority.
Special Event Tenant User Liability Insurance
The City of San Marcos further protects against liability damages by requiring tenant users of certain property to purchase low-cost tenant user liability insurance for certain activities on agency property. The insurance premium is paid by the tenant user and is paid to the City of San Marcos according to a schedule. The City of San Marcos then pays for the insurance. The insurance is facilitated by the Authority.
(4) Adequacy of Protection
During the past three fiscal years, none of the above programs of protection experienced settlements or judgments that exceeded pooled or insured coverage. There were also no significant reductions in pooled or insured liability coverage in 2020-21.
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
-80-
13) INSURANCE, (continued)
B) Public Agency Self-Insurance System (PASIS)
Workers Compensation
The City is a member of the Public Agency Self-Insurance System (PASIS) which is a joint powers authority of nine fire districts in San Diego County and the City of San Marcos. PASIS’ purpose is to provide for payment of workers’ compensation claims, purchase claims examiner services, general counsel services and excess insurance coverage. Members are responsible for paying their own claims and related expenses.
For claims arising prior to July 1, 2001, the City was responsible for the first $250,000 of each loss. For claims arising during the year ended June 30, 2002, the deductible amount was $400,000. For claims arising between July 1, 2002 and June 30, 2009, the deductible amount was $500,000. The deductible for claims arising after June 30, 2009 is $300,000.
PASIS carries excess insurance through a co mmercial insurance company to cover amounts over the self-insured retention. PASIS requires the City to maintain a minimum of $300,000 cash deposit with PASIS. At June 30, 2021, the City had $740,538 on deposit with PASIS and claims payable of $1,457,862.
14) JOINT VENTURES
North County Dispatch Joint Powers Authority
The City is a member of the North County Dispatch Joint Powers Authority (the JPA). The JPA was formed on June 11, 1984, and other member agencies include the Rancho Santa Fe Fire Protection District, the North County Fire Protection District and the cities of Vista, Solana Beach, Oceanside, Encinitas, and Carlsbad. The purpose of the JPA is to provide dispatching and emergency communication services for fire protection, security, and medical services.
Each member provides an annually determined contribution towards the ongoing operation. In the event of dissolution of the JPA, available assets shall be distributed to the member agencies in proportion to the aggregate contribution made by each member agency during the entire term of the agreement.
The activities of the JPA are supervised by a board consisting of eight directors who are appointed by each member’s governing body.
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
-81-
14) JOINT VENTURES, (continued)
North County Dispatch Joint Powers Authority, (continued)
Summarized audited information of the JPA for the fiscal year ended June 30, 2021, the most current available information, is as follows:
Assets $ 8,386,375
Deferred outflows 1,120,281
Liabilities (851,319)
Deferred inflows (780,443)
Net position $ 7,874,894
Revenues $ 5,898,677
Expenses (5,141,403)
Change in net position $ 757,274
The City’s share of the JPA’s assets, liabilities, equity, and changes therein during the year is not available and is not material to the City’s financial statements. Separate financial statements of the JPA are available at 16936 El Fuego Drive (P.O. Box 410), Rancho Santa Fe, CA 92067.
Rancheros Commercial Park
The former City of San Marcos Redevelopment Agency (the Agency) entered into a Disposition and Development Agreement with LBP Partnership on March 6, 1989. In accordance with that Agreement, the Agency and LBP Partnership formed a Limited Partnership known as Rancheros Commercial Park, a Limited Partnership. The purpose of this Limited Partnership was to engage in the business of leasing, developing, constructing, maintaining and operating certain commercial/industrial property. Each of the Partners leased to the Partnership certain real property owned by the General and Limited Partners. The capital contributions to be made by Partners were to be adjusted to match, on a percentage basis, the proportionate land areas leased by the Partners to the Partnership. The net profits of the Partnership are allocated to, and net losses suffered by the Partnership are borne by, the Partners in proportion to their respective contributions of capital and real estate. On March 26, 2010, the Agency’s interest in this partnership was transferred to the City. The City’s equity interest in this Limited Partnership is $7,225,974 as of June 30, 2021. Separate financial statements for this joint venture are not available.
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
-82-
15) ASSESSMENT DISTRICT, COMMUNITY FACILITIES DISTRICTS BONDS AND
CONDUIT DEBT
Bonds issued to finance public improvement pr ojects in certain assessment districts and community facilities districts are liabilities of the property owners and are secured by liens against the assessed property. The City acts as an agent for the collection of special assessments from the property owners and the payment of principal and interest to the bondholders. The City has no obligation or duty to pay any delinquency out of any available funds of the City. Neither the faith and credit nor the taxing power of the City is pledged to the payment of the bonds. Therefore, none of the following obligations are included in the accompanying financial statements. The balance in the reserve account at the end of the fiscal year for each bond issue was above the reserve requirement.
Amount Outstanding
of Issue June 30, 2021
City of San Marcos Community Facilities District
No. 88-1, Special Tax Refunding Bonds, Series
2012, (Improvement Area No. 1, 2, 3 ) $ 22,425,000 7,800,116$ City of San Marcos Community Facilities District
No. 99-01, Special Tax Refunding Bonds,
Series 2021 (Improvement Area C2B, I1, I2) 9,720,000 9,720,000 City of San Marcos Community Facilities District
No. 2002-01 (University Commons), Special
Tax Refunding Bonds, Series 2021
(Improvement Area No. 1) 10,575,000 10,575,000
City of San Marcos Community Facilities District
No. 99-01, 2018 Special Tax Refunding Bonds
(Improvement Area D2L, D2U, D3, D4, E1, E2,
H2, H3) 16,955,000 15,755,000
City of San Marcos Community Facilities District
No. 99-01, 2014 Special Tax Refunding Bonds
(Improvement Area A1, A2, B1, B2, C1, D1,
F 2 / V 2 ,G 3 ,H 1 A ,H 1 B ,J ,M ,N 1 ,N 2 ,R 1 ,R 2 , V1A, CFD 91-01) 32,395,000 24,200,000
Total 92,070,000$ 68,050,116 $
Type of Debt
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
-83-
15) ASSESSMENT DISTRICT, COMMUNITY FACILITIES DISTRICTS BONDS AND CONDUIT DEBT, (continued)
The City, the Successor Agency to the former Redevelopment Agency, the San Marcos Public Facilities Authority, San Marcos Public Financing Authority, and the California Mobile Home Financing Authority have issued bonds to provide financing for the acquisition, construction and/or development of various residential dwelling units, industrial facilities, school facilities, facilities for the elderly and rental housing for low and moderate income persons. However, neither the faith and credit nor the general taxing power of the City, Successor Agency or Authorities have been pledged to the payments of the bonds. Furthermore, the City, Agency or Authorities do not have any obligations for the payments of the bonds in the case of default.
Therefore, none of the following obligations are included in the accompanying financial statements.
Outstanding
Type of Debt June 30, 2021
$39,815,000 Successor Agency to the San Marcos
Redevelopment Agency 2018 Pass-Through Tax Revenue
Refunding Bonds Project Area #3 - San Marcos Unified
School District $ 37,475,000
16) COMMITMENTS AND CONTINGENT LIABILITIES
The City is a defendant in certain legal actions arising in the normal course of operations. The amount of loss, if any, that may result from those actions cannot be reasonably estimated at this time.
17) SUCCESSOR AGENCY TRUST FOR ASSETS OF FORMER REDEVELOPMENT AGENCY
On December 29, 2011, the California Supreme Court upheld Assembly Bill 1X 26 (the Bill) that provides for the dissolution of all redevelopment agencies in the State of California. This action impacted the reporting entity of the City of San Marcos that previously had reported a redevelopment agency within the reporting entity of the City as a blended component unit.
The Bill provides that upon dissolution of a redevelopment agency, either the City or another unit of local government will agree to serve as the “successor agency” to hold the assets until they are distributed to other units of state and local government. On January 10, 2012, the City Council elected to become the Successor Agency for the former Redevelopment Agency in accordance with the Bill as part of City resolution number 2012-7607.
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
-84-
17) SUCCESSOR AGENCY TRUST FOR ASSETS OF FORMER REDEVELOPMENT AGENCY, (continued)
After enactment of the law, which occurred on June 28, 2011, redevelopment agencies in the State of California cannot enter into new projects, obligations or commitments. Subject to the control of a newly established oversight board, remaining assets can only be used to pay enforceable obligations in existence at the date of dissolution (including the completion of any unfinished projects that were subject to legally enforceable contractual commitments).
In future fiscal years, successor agencies will only be allocated revenue in the amount that is necessary to pay the estimated annual installment payments on enforceable obligation of the former redevelopment agency until all enforceable obligations of the prior redevelopment agency have been paid in full and all assets have been liquidated.
The Bill directs the State Controller of the State of California to review the propriety of any transfers of assets between redevelopment agencies and other public bodies that occurred after January 1, 2011. If the public body that received such transfers is not contractually committed to a third party for the expenditure or encumbrance of those assets, the State Controller is required to order the available assets to be transferred to the public body designated as the successor agency by the Bill.
Management believes, in consultation with legal counsel, that the obligations of the former Redevelopment Agency due to the City are valid enforceable obligations payable by the Successor Agency Trust under the requirements of the Bill. The ability of the Successor Agency to repay the City is dependent upon the sufficiency of available tax revenues to fund such repayment. Revenues are only available for repayment to the extent that all other obligations of the Successor Agency have been provided for in accordance with a complex computation set forth in California Assembly Bill No. 1484. The City believes that there will be sufficient tax revenue to permit eventual repayment in full to the City.
After the date of dissolution, the assets and activities of the dissolved Redevelopment Agency are reported in a fiduciary fund (private-purpose trust fund) in the financial statements of the City, pending the liquidation and distribution of the assets and liabilities of the former Redevelopment Agency to other taxing entities in accordance with state law.
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
-85-
17) SUCCESSOR AGENCY TRUST FOR ASSETS OF FORMER REDEVELOPMENT AGENCY, (continued)
Net Investment in Direct Financing Lease
In fiscal year 1992-93, the former San Marcos Redevelopment Agency entered into a direct financing lease with the San Marcos Unified School District whereby the Agency had agreed to lease 50% of the Public Works Yard to the School District, with a purchase option at the end of the lease. The lease was amended in fiscal year 2001-02 due to the refinancing of the Civic Center/Public Works Yard Bond issue. Upon t he dissolution of the Redevelopment Agency, this lease was transferred to the Successor Agency of the former Redevelopment Agency.
The terms of the amended lease call for semi-annual payments of $98,906 including interest at 5.87% each July and January 15 commencing July 15, 2002 to July 15, 2031 and payments of $62,663 with no interest from July 15, 2002 to July 15, 2022. A net investment in direct financing lease has been recorded in the Successor Agency Trust to account for the net present value of the lease payments at June 30, 2021.
The following lists the components of the net investment in the direct financing lease as of June 30, 2021:
Total minimum lease payments to be received $ 2,828,982 Less unearned income (1,106,777)
Net investment in direct financing lease $ 1,722,205
At June 30, 2021, the future minimum lease payments are as follows:
Year Ending
June 30, Amount
2022 234,658 $
2023 178,508
2024 122,745
2025 130,055
2026 137,801
2027-2031 822,352
2032 96,086
Total 1,722,205 $
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
-86-
17) SUCCESSOR AGENCY TRUST FOR ASSETS OF FORMER REDEVELOPMENT AGENCY, (continued)
Long-Term Liabilities
The following is a summary of changes in long-term liabilities for the year ended June 30, 2021:
Balance Balance Due Within
June 30, 2020 Additions Deletions June 30, 2021 One Year Bonds payable 229,870,000$ - $ (12,375,000)$ 217,495,000 $ 12,800,000 $ Plus (less) deferred amounts:
Issuance premium 9,104,771 - (505,821) 8,598,950 - Issuance discount (1,731,867) - 157,442 (1,574,425) - Total bonds payable 237,242,904 - (12,723,379) 224,519,525 12,800,000 Cooperation agreement 23,275,296 - - 23,275,296 - Advance from San Marcos
Affordable Housing Fund 9,754,663 - (2,500,000) 7,254,663 - Due to other governments - - - - - Total 270,272,863$ - $ (15,223,379)$ 255,049,484 $ 12,800,000 $
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
-87-
17) SUCCESSOR AGENCY TRUST FOR ASSETS OF FORMER REDEVELOPMENT AGENCY, (continued)
Bonds Payable
$ 36,840,000
67,710,000
112,945,000
Total bonds payable 217,495,000$
In July 2015, the Successor Agency to the San Marcos Redevelopment Agency (Agency) issued $84,710,000 Tax Allocation Refunding Bonds, Series 2015A, to refund certain outstanding obligations of the Agency. The bonds consists of serial bonds of $84,710,000 maturing from 2016 to 2034 on October 1 in annual installments of $2,705,000 to $6,985,000. Interest is payable semi-annually on October 1 and April 1 commencing October 1, 2015 at rates ranging from 2.00% to 5.00%. Bonds maturing on and after October 1, 2026 are subject to redemption in whole or in part at the option of the Agency on any date on or after October 1, 2025. An original issue premium of $12,381,067 is being amortized over the life of the debt. The reserve requirement was fully funded at the end of the fiscal year.
In July 2015, the Successor Agency to the San Marcos Redevelopment Agency (Agency) issued $139,285,000 Taxable Tax Allocation Refunding Bonds, Series 2015B, to refund certain outstanding obligations of the Agency. The bonds consist of serial bonds of $44,160,000 maturing from 2016 to 2025 in annual installments of $5,125,000 to $6,410,000 and term bonds of $95,125,000 maturing from 2024 to 2038. Interest is payable semi- annually on October 1 and April 1 commencing October 1, 2015 at rates ranging from 1.09% to 5.002%. Bonds maturing on or after October 1, 2026, other than the Term Bonds maturing on October 1, 2029, are subject to optional redemption, in whole or in part, on any date on or after October 1, 2025. Bonds maturing on October 1, 2024, October 1, 2027, October 1, 2029, October 1, 2034, and October 1 , 2038 are subject to redemption in whole, or in part by lot, on October 1, of each year commencing October 1, 2023. A net original discount of $747,191 is being amortized over the life of the debt. The reserve requirement was fully funded at the end of the fiscal year.
In December 2017, the Successor Agency to the San Marcos Redevelopment Agency (Agency) issued $47,800,000 Tax Allocation Refunding Bonds, Series 2017, to refund the outstanding $52,805,000 San Marcos Redevelopment Agency Housing Set-Aside Tax Allocation Bonds, Series 2010, (Taxable). The bonds consist entirely of serial bonds of $47,800,000 maturing from 2018 to 2030 in annual installments of $3,150,000 to $4,595,000. Interest is payable semi-annually on April 1 and October 1 commencing April 1, 2018 at rates ranging from 1.5% to 3.25%.
Bonds maturing on or after October 1, 2028 are subject to optional redemption, in whole or in part, on any date on or after October 1, 2027. A discount of $1,000,315 is being amortized over the life of the debt. The reserve requirement was met by the issuance of a municipal bond debt service reserve insurance policy issued by Assured Guaranty Municipal Corp. at the end of the fiscal year.
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
-88-
17) SUCCESSOR AGENCY TRUST FOR ASSETS OF FORMER REDEVELOPMENT AGENCY, (continued)
Bonds Payable, (continued)
In January 2011, the former Redevelopment Agency issued $52,805,000 2010 Tax Allocation Bonds to finance costs of low and moderate income housing projects, including the acquisition of land and improvements and the construction of certain infrastructure improvements. The bonds consist of serial bonds of $10,590,000 maturing form 2013 to 2021 in annual installments of $1,655,000 to $2,565,000 and term bonds of $42,215,000 maturing from 2018 to 2030. Interest is payable semi-annually on April 1 and October 1 commencing April 1, 2011 at rates ranging from 3.25% to 8.5%.
These bonds were paid in full in the current year by the Successor Agency to the San Marcos Redevelopment Agency Taxable Tax Allocation Refunding Bonds, Series 2017. As a result of the current refunding, the Successor Agency decreased its debt service cash flow by $15,193,410, resulting in an economic gain of $7,052,139 (calculated as the difference between the debt service payments under the old and new debt discounted to present value using the effective interest rate).
Bond debt service requirements to maturity are as follows:
Year Ending
June 30
2022 12,800,000$ 11,754,491 $ 24,554,491 $
2023 13,210,000 11,196,091 24,406,091
2024 13,690,000 10,599,741 24,289,741
2025 13,765,000 9,938,635 23,703,635
2026 14,310,000 9,291,522 23,601,522
2027-2031 80,050,000 35,093,532 115,143,532
2032-2036 52,210,000 11,452,376 63,662,376
2037-2039 17,460,000 1,554,124 19,014,124
Total 217,495,000$ 100,880,512 $ 318,375,512 $
TotalPrincipal Interest
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
-89-
17) SUCCESSOR AGENCY TRUST FOR ASSETS OF FORMER REDEVELOPMENT AGENCY, (continued)
Cooperation Agreement
In fiscal year 1993-94, the former Redevelopment Agency entered into a cooperation agreement with the County of San Diego (the County) to alleviate any financial burden or detriment caused to the County as a result of amending the Redevelopment Plan for Project Area No. 1. The amount owed to the County increases each year by an annual amount equal to the County’s portion of actual Agency tax revenue after deducting the housing set-aside.
The unpaid principal and interest amount bears a 4% annual interest rate between fiscal year 1993-94 and the trigger year (the fiscal year in which the amount of tax revenue that has been allocated and paid to the Agency exceeds the amount of $100,000,000) and a floating interest rate thereafter. Payments consisting of 68% of the County’s portion of tax increment are to be made annually beginning in the trigger year. Beginning in fiscal year 2012-13, the Agency is to annually pay the County the following percentages of gross Agency tax revenue:
2018-19 through 2022-23 30%
2023-24 through 2027-28 35%
2028-29 through 2032-33 40%
2033-34 through 2037-38 45%
2038-39 and thereafter 50%
$ 23,275,296
Once the County has been fully paid all principal and interest, if the Agency is still entitled to receive Agency tax revenue, annual payments to the County will equal the County’s portion after deducting the housing set-aside.
Advance from the City of San Marcos
7,254,663$
The San Marcos Affordable Housing Fund loaned $24,383,743 to the Fiduciary Funds to fund the fiscal years 2009-10 and 2010-11 Supplemental Educational Revenue Augmentation Fund (SERAF) payments. The loans bear an interest rate equal to the City's average portfolio rate and are to be repaid subject to Health & Safety Code Section 34176(d), under the provisions of Assembly Bill 1X 26 that provides for the dissolution of all redevelopment agencies in the State of California.
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
-90-
18) OTHER REQUIRED NOTE DISCLOSURES
Deficit Fund Balances
As of June 30, 2021, the following non-major funds presented a negative fund balance.
Special Revenue Funds
Senior Nutrition Grant (14,383) $
Capital Projects Funds
Transportation Sales Tax (267,459)
Governmental Funds - Non-Major
The Capital Projects Fund’s deficit fund balance will be remedied by requesting reimbursement of CIP expenses.
19) COVID-19 CONSIDERATIONS
On March 11, 2020, the World Health Organization declared the novel strain of coronavirus (COVID-19) a global pandemic and recommended containment and mitigation measures worldwide. The COVID-19 outbreak in the Unit ed States caused business disruption through mandated and voluntary closings of businesses and shelter in place orders for all but those deemed essential services. While the business disr uption was temporary, there is considerable uncertainty around the duration of the pandemic. Therefore, the ultimate financial impact and duration cannot be estimated at this time, and no adjustments have been made to these financial statements as a result of this uncertainty.
20) SUBSEQUENT EVENT
On March 11, 2021, HR 1319, the American Rescue Plan Act of 2021 (ARPA), was signed into law. ARPA was designed to provide assistance to individuals, businesses and, state and local governments to assist in the economic recovery from the ongoing COVID-19 pandemic. The City of San Marcos was granted an allocation of $18,279,146, delivered in two tranches of $9,139,573 in June 2021 and June 2022. The qualified use of these funds includes public safety, infrastructure, and restoration of services to pre-pandemic levels.
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
-91-
21) PRIOR PERIOD RESTATEMENT
As discussed in Note 1 the Ci ty implemented GASB Statement No. 84. Accordingly, beginning fund balances for the General Fund and beginning fiduciary net position for the custodial funds has been restated for changes related to the implementation of GASB Statement No. 84 as follows:
FUND STATEMENTS
General Fund
General Fund
Fund balance - beginning, as previously reported 107,527,897 $ Implementation of GASB 84 (130,885)
Fund balance - beginning, as restated 107,397,012 $
Fiduciary Funds - Custodial
Community Facilities District 88-1
Net position - beginning, as previously reported - $
Implementation of GASB 84 2,563,789
Net position - beginning, as restated 2,563,789 $
Community Facilities District 99-1
Net position - beginning, as previously reported - $
Implementation of GASB 84 7,133,438
Net position - beginning, as restated 7,133,438 $
Community Facilities District 02-01
Net position - beginning, as previously reported - $
Implementation of GASB 84 1,920,948
Net position - beginning, as restated 1,920,948 $
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2021
-92-
21) PRIOR PERIOD RESTATEMENT, (continued)
The effect to the Net Position of the Government-Wide Financial Statements resulting from the total of the adjustments to the beginning governmental fund balances was as follows:
GOVERNMENT WIDE STATEMENTS
Governmental Activities:
Net position - beginning, as previously reported 912,836,314 $ Implementation of GASB 84 (130,885)
Loss on sale of land (7,722,430)
Net position - beginning, as restated 904,982,999 $
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REQUIRED SUPPLEMENTARY
INFORMATION
City of San Marcos
Required Supplementary Information
Schedule of Changes in Net Pension Liability and Related Ratios Last Ten Years*
-93-
Miscellaneous Plan
Measurement Measurement Measurement Measurement
Period Period Period Period
6/30/2014 6/30/2015 6/30/2016 6/30/2017
TOTAL PENSION LIABILITY
Service Cost 2,750,478$ 2,559,947 $ 2,553,229 $ 2,805,674 $ Interest 7,817,338 8,083,219 8,584,986 8,918,976 Difference Between Expected and Actual Experience - (2,717,435) 898,809 (697,183) Changes of Assumptions - (2,000,140) - 7,506,452 Benefit Payments, Including Refunds of Employee Contributions (4,059,146) (4,587,163) (5,372,003) (5,737,609) Net Change in Total Pension Liability 6,508,670 1,338,428 6,665,021 12,796,310 Total Pension Liability - Beginning 104,885,512 111,394,182 112,732,610 119,397,631 Total Pension Liability - Ending (a) 111,394,182 $ 112,732,610 $ 119,397,631 $ 132,193,941 $
PLAN FIDUCIARY NET POSITION
Net Plan to Plan Resource Movement - $ - $ - $ - $ Contributions - Employer 3,469,533 4,558,184 4,385,959 9,542,711 Contributions - Employee 1,094,087 1,302,378 1,348,496 1,169,316 Net Investment Income 10,830,423 1,709,531 438,181 8,627,538 Benefit Payments, Including Refunds of Employee Contributions (4,059,146) (4,587,163) (5,372,003) (5,737,609) Administrative Expense - (85,688) (46,382) (113,479) Other Miscellaneous Income/(Expense)1
- - - - Net Change in Fiduciary Net Position 11,334,897 2,897,242 754,251 13,488,477 Plan Fiduciary Net Position - Beginning 61,873,569 73,208,466 76,105,708 76,859,959 Plan Fiduciary Net Position - Ending (b) 73,208,466 $ 76,105,708 $ 76,859,959 $ 90,348,436 $ Plan Net Pension Liability - Ending (a) - (b) 38,185,716 $ 36,626,902 $ 42,537,672 $ 41,845,505 $ Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 65.72% 67.51% 64.37% 68.35% Covered Payroll 12,556,977$ 14,085,514 $ 14,012,521 $ 14,219,367 $ Plan Net Pension Liability as a Percentage of Covered Payroll 304.10% 260.03% 303.57% 294.29% Notes to Schedule:
* Measurement period June 30, 2014 was the first year of implementation, therefore, only seven years are presented.
Changes in Benefit Terms: The figures above do not include any liability impact that may have resulted from plan changes which occurred after June 30, 2 016. This applies for voluntary benefit changes as well as any offers of Two Years Additional Service Credit (a.k.a. Golden Handshakes).
Changes in Assumptions: For 2020, the Plan adopted a new amortization policy effective with the 2019 actuarial valuation. The new amortization polic y shortens the period over which actuarial gains and losses are amortized from 30 years to 20 years with the payments computed as a level dollar amount. In addition, th e new policy does not utilize a five-year ramp-up and ramp-down on UAL bases attributable to assumption changes and non-investment gains/losses. The new policy a lso does not utilize a five-year ramp-down on investment gains/losses. These changes apply only to new UAL bases established on or after June 30, 2019. There were no changes in assumptions in 2019 or 2020. In 2018, demographic assumptions and inflation rate were changed in accordance to the CalPERS Experience Study and Revie wo f Actuarial Assumptions December 2017. There were no changes in the discount rate. In 2017, the accounting discount rate was reduced from 7.65 percent t o7 . 1 5 percent. In 2016, there were no changes. In 2015, amounts reported reflect an adjustment of the discount rate from 7.5 percent (net of administrative e xpense) to 7.65 percent (without a reduction for pension plan administrative expense). In 2014, amounts reported were based on the 7.5 percent discount rate. 1 During fiscal year 2017-18, as a result of Governmental Accounting Standards Board Statement (GASB) No. 75, Accounting and Financial Reporting for Postemployment Benefit Plans Other than Pensions (GASB 75), CalPERS reported its proportionate share of activity related to postemployment benefits for participation in the State of California's agent OPEB plan. Accordingly, CalPERS recorded a one-time expense as a result of the adoption of GASB 75.
Additionally, CalPERS employees participate in various State of California agent pension plans and during fiscal year 2017-18, CalPERS recorded a c orrection to previously reported financial statements to properly reflect its proportionate share of activity related to pensions in accordance with GASB Statement No. 68, Accounting and Financial Report for Pensions (GASB 68).
City of San Marcos
Required Supplementary Information
Schedule of Changes in Net Pension Liability and Related Ratios (continued) Last Ten Years*
-94-
Miscellaneous Plan, (continued)
Measurement Measurement Measurement
Period Period Period
6/30/2018 6/30/2019 6/30/2020
TOTAL PENSION LIABILITY
Service Cost 2,898,829$ 2,938,266 $ 2,703,721 $ Interest 9,287,287 9,846,868 10,335,678
Difference Between Expected and Actual Experience 283,350 2,125,402 1,290,024 Changes of Assumptions (933,150) - - Benefit Payments, Including Refunds of Employee Contributions (6,202,870) (6,806,974) (7,435,808) Net Change in Total Pension Liability 5,333,446 8,103,562 6,893,615 Total Pension Liability - Beginning 132,193,941 137,527,387 145,630,949 Total Pension Liability - Ending (a) 137,527,387 $ 145,630,949 $ 152,524,564 $
PLAN FIDUCIARY NET POSITION
Net Plan to Plan Resource Movement (225) $ - $ - $ Contributions - Employer 4,278,656 4,615,503 5,080,583 Contributions - Employee 1,126,769 1,104,152 1,102,880 Net Investment Income 7,721,226 6,421,470 5,149,684 Benefit Payments, Including Refunds of Employee Contributions (6,202,870) (6,806,974) (7,435,808) Administrative Expense (140,788) (69,124) (143,977) Other Miscellaneous Income/(Expense)1
(267,358) 225 -
Net Change in Fiduciary Net Position 6,515,410 5,265,252 3,753,362 Plan Fiduciary Net Position - Beginning 90,348,436 96,863,846 102,129,098 Plan Fiduciary Net Position - Ending (b) 96,863,846 $ 102,129,098 $ 105,882,460 $ Plan Net Pension Liability - Ending (a) - (b) 40,663,541 $ 43,501,851 $ 46,642,104 $ Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 70.43% 70.13% 69.42% Covered Payroll 14,197,035$ 14,148,630 $ 13,872,161 $ Plan Net Pension Liability as a Percentage of Covered Payroll 286.42% 307.46% 336.23%
City of San Marcos
Required Supplementary Information
Schedule of Plan Contributions – Agent Plan
Last Ten Years*
-95-
Miscellaneous Plan
Fiscal Year
Actuarially
Determined
Contribution
Contributions in
Relation to the
Actuarially
Determined
Contribution
Contribution
Deficiency
(Excess)
Employer's
Covered Payroll
Contributions as
a Percentage of
Covered Payroll
6/30/2015 4,708,421 $ (4,708,421) $ - $ 14,085,514$ 33.43% 6/30/2016 3,975,080 (3,975,080) - 14,012,521 28.37% 6/30/2017 4,499,034 (9,499,034) (5,000,000) 14,219,367 66.80% 6/30/2018 4,274,518 (4,274,518) - 14,197,035 30.11% 6/30/2019 4,613,016 (4,613,016) - 14,148,630 32.60% 6/30/2020 5,024,888 (5,024,888) - 13,872,161 36.22% 6/30/2021 6,321,721 (6,321,721) - 11,811,184 53.52% Notes to Schedule:
Actuarial Cost Method
Amortization Method/Period
Asset Valuation Method
Actuarial Assumptions:
Discount Rate
Inflation
Salary Increases
Mortality Rate Table
Post Retirement Benefit Increase The lesser of contract COLA or 2.50% until Purchasing Power Protection Allowance floor on purchasing power applies, 2.50% thereafter.
Actuarial Value of Assets. For details, see June 30, 2019, Funding Valuation Report.
Entry Age Normal
For details, see June 30, 2019, Funding Valuation Report. * Fiscal year 2014-15 (measurement date June 30, 2014) was the first year of implementation, therefore, only seven years are presented.
The actuarial methods and assumptions used to set the actuarially determined contributions for Fiscal Year 2020-21 were from the June 30, 2019, Funding Valuation Report.
2.50%
Varies by Entry Age and Service
The mortality table used was developed based on CalPERS’ specific data. The probabilities of mortality are based on the 2017 CalPERS Experience Study for the period from 1997 to 2015. Pre-retirement and Post-retirement mortality rates include 15 years of projected mortality improvement using 90% of Scale MP-2016 published by the Society of Actuaries.
7.15%
City of San Marcos
Required Supplementary Information
Schedule of City’s Proportionate Share of the Plan’s Net Pension Liability and Related Ratios as of the Measurement Date
Last Ten Years*
-96-
Safety Plan
Measurement Date
Employer's
Proportion of the
Collective Net
Pension Liability1
Employer's
Proportionate
Share of the
Collective Net
Pension Liability
Employer's
Covered Payroll
Employer's
Proportionate
Share of the
Collective Net
Pension Liability
as a Percentage
of the
Employer's
Covered Payroll
Pension Plan
Fiduciary Net
Position as a
Percentage of
the Total
Pension Liability
6/30/2014 0.234342% 9,862,978 $ 6,222,192 $ 158.51% 81.42% 6/30/2015 0.166126% 11,402,729 6,725,963 169.53% 80.23% 6/30/2016 0.171957% 14,879,594 8,996,362 165.40% 75.77% 6/30/2017 0.175583% 17,413,036 6,816,670 255.45% 75.12% 6/30/2018 0.182753% 17,610,602 6,582,579 267.53% 76.85% 6/30/2019 0.190512% 19,521,871 6,690,455 291.79% 75.78% 6/30/2020 0.200112% 21,773,049 6,854,243 317.66% 74.65% 1 Proportion of the collective net pension liability represents the plan's proportion of PERF C, which includes both the Miscellaneous and Safety Risk Pools excluding the 1959 Survivors Risk Pool. * Measurement period June 30, 2014 was the first year of implementation, therefore, only seven years are presented.
City of San Marcos
Required Supplementary Information
Schedule of Plan Contributions – Cost Sharing Plan
Last Ten Years*
-97-
Safety Plan
Fiscal Year
Actuarially
Determined
Contribution
Contributions in
Relation to the
Actuarially
Determined
Contribution
Contribution
Deficiency
(Excess)
Employer's
Covered
Payroll
Contributions
as a
Percentage of
Covered Payroll
6/30/2015 1,938,477$ (1,938,477) $ - $ 6,725,963$ 28.82% 6/30/2016 1,976,541 (1,976,541) - 8,996,362 21.97% 6/30/2017 1,550,376 (1,550,376) - 6,816,670 22.74% 6/30/2018 2,179,053 (2,179,053) - 6,582,579 33.10% 6/30/2019 2,456,542 (2,456,542) - 6,690,455 36.72% 6/30/2020 2,639,604 (2,639,604) - 6,854,243 38.51% 6/30/2021 2,878,444 (2,878,444) - 6,838,996 42.09% Notes to Schedule:
Change in Benefit Terms: None
* Fiscal year 2014-15 (measurement date June 30, 2014) was the first year of implementation, therefore, only seven years are presented.
Changes in Assumptions: Changes in Assumptions: For 2020, the Plan adopted a new amortization policy effective with the 2019 actuarial valuation. The new amortization policy shortens the period over which actuarial gains and losses are amortized from 30 years to 20 years with the payments computed as a level dollar amount. In addition, the new policy does not utilize a five-year ramp-up and ramp-down on UAL bases attributable to assumption changes and non- investment gains/losses. The new policy also does not utilize a five-year ramp-down on investment gains/losses. These changes apply only to new UAL bases established on or after June 30, 2019. There were no changes in assumptions in 2019. In 2018, demographic assumptions and inflation rate were changed in accordance to the CalPERS Experience Study and Review of Actuarial Assumptions December 2017. There were no changes in the discount rate. In 2017, the accounting discount rate was reduced from 7.65 percent to 7.15 percent. In 2016, there were no changes. In 2015, amounts reported reflect an adjustment of the discount rate from 7.5 percent (net of administrative expense) to 7.65 percent (without a reduction for pension plan administrative expense). In 2014, amounts reported were based on the 7.5 percent discount rate.
City of San Marcos
Required Supplementary Information
Schedule of Changes in the Net OPEB Liability and Related Ratios as of the Measurement Date
Last Ten Years*
-98-
Fiscal Year 2017-18 2018-19 2019-20 2020-21
Measurement Period 2016-17 2017-18 2018-19 2019-20
Total OPEB Liability
Service cost 600,000 $ 533,323 $ 409,539 $ 454,666 $ Interest 248,000 302,110 269,366 272,594 Differences between expected and
actual experience - (1,812,466) - 407,944 Changes of assumptions (815,000) (130,218) 351,334 1,451,482 Benefit payments (206,000) (267,000) (227,858) (266,812) Net change in total OPEB liability (173,000) (1,374,251) 802,381 2,319,874 Total OPEB liability - beginning 8,212,000 8,039,000 6,664,749 7,467,130 Net OPEB liability - ending 8,039,000 $ 6,664,749 $ 7,467,130 $ 9,787,004 $ Plan fiduciary net position as a percentage
of the total OPEB liability 0.0% 0.0% 0.0% 0.0%
Covered-employee payroll 25,017,697 $ 24,297,000 $ 23,281,622 $ 21,370,676 $ Total OPEB liability as a percentage of
covered-employee payroll 32.1% 27.4% 32.1% 45.8%
The City does not have assets accumulated in a trust that meet the criteria of GASB 75 to pay related benefits. * Fiscal year 2017-18 (measurement date June 30, 2017) was the first year of implementation, therefore, only four years are presented.
City of San Marcos
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual General Fund
For the Year Ended June 30, 2021
-99-
Variance with
Original Final Actual Final Budget
REVENUES
Taxes and special assessments 25,882,829$ 26,382,930 $ 26,082,704 $ (300,226) $ Licenses and permits 5,140,705 5,370,736 5,758,317 387,581 Intergovernmental 17,385,348 19,952,872 29,945,805 9,992,933 Charges for services 16,858,321 16,150,084 17,466,496 1,316,412 Developer fees 21,700 21,700 26,992 5,292 Fines and forfeitures 348,000 135,900 116,069 (19,831) Investment and rental income 6,454,438 6,353,638 6,991,645 638,007 Miscellaneous 514,071 486,367 623,786 137,419 Total Revenues 72,605,412 74,854,227 87,011,814 12,157,587
EXPENDITURES
Current:
General government 23,132,456 24,779,939 21,890,560 2,889,379 Community development 3,895,057 3,740,510 5,120,026 (1,379,516) Public safety 40,527,802 41,160,968 42,204,560 (1,043,592) Highways, streets and parks 9,828,293 10,033,218 9,758,813 274,405 Culture and recreation 2,987,218 2,912,883 2,891,449 21,434 Capital outlay 220,000 236,462 4,866 231,596 Debt service:
Principal 672,651 672,651 701,129 (28,478) Interest and fiscal charges 91,469 91,469 154,028 (62,559) Total Expenditures 81,354,946 83,628,100 82,725,431 902,669 Excess (Deficiency) of Revenues
over Expenditures (8,749,534) (8,773,873) 4,286,383 13,060,256
OTHER FINANCING SOURCES (USES)
Capital leases - - 585,414 585,414 Sale of general capital assets - 1,943,500 2,427,572 484,072 Transfers in 8,369,160 4,615,656 4,107,198 (508,458) Transfers out (5,375,500) (7,599,288) (2,066,815) 5,532,473 Total Other Financing Sources (Uses) 2,993,660 (1,040,132) 5,053,369 6,093,501 Net Change in Fund Balance (5,755,874) (9,814,005) 9,339,752 19,153,757 Fund Balance, Beginning 107,397,012 107,397,012 107,397,012 - Fund Balance, Ending 101,641,138$ 97,583,007 $ 116,736,764 $ 19,153,757 $ Budgeted Amounts
City of San Marcos
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual San Marcos Affordable Housing
For the Year Ended June 30, 2021
-100-
Variance with
Original Final Actual Final Budget
REVENUES
Developer fees 646,400$ 646,400 $ 2,048,466 $ 1,402,066 $ Investment and rental income 469,000 469,000 1,015,245 546,245 Miscellaneous 868,000 868,000 398,895 (469,105) Total Revenues 1,983,400 1,983,400 3,462,606 1,479,206
EXPENDITURES
Current:
General government 298,414 298,414 325,182 (26,768) Community development 13,439,000 13,461,730 7,589,446 5,872,284 Total Expenditures 13,737,414 13,760,144 7,914,628 5,845,516 Excess (Deficiency) of Revenues
Over Expenditures (11,754,014) (11,776,744) (4,452,022) 7,324,722
OTHER FINANCING SOURCES
Transfers in 142,500 142,500 142,500 - Transfers out (500,000) (530,000) - 530,000 Total Other Financing Sources (357,500) (387,500) 142,500 530,000 Net Change in Fund Balance (12,111,514) (12,164,244) (4,309,522) 7,854,722 Fund Balance, Beginning 45,254,867 45,254,867 45,254,867 - Fund Balance, Ending 33,143,353$ 33,090,623 $ 40,945,345 $ 7,854,722 $ Budgeted Amounts
City of San Marcos
Notes to Required Supplementary Information
June 30, 2021
-101-
1) BUDGETARY INFORMATION
The City adopts an operating budget annually during June to be effective July 1, for the ensuing fiscal year. Budgeted expenditures are adopted through the passage of a resolution. This resolution constitutes the maximum authorized expenditures for the fiscal year and cannot legally be exceeded except by subsequent amendments of the budget by the City Council.
Budgets for all governmental type funds are adopted on a basis substantially consistent with generally accepted accounting principles (GAAP). Annual budgets are adopted for the General, Special Revenue, Debt Service Funds with the exception of the HOME Grant Special Revenue Fund. Annual budgets are not adopted for all of the Capital Projects Funds. Therefore, budget and actual financial statements have not been prepared for them because a comparison of such budgetary amounts to annual revenues and expenditures is not meaningful.
The City uses an encumbrance system as an extension of normal budgetary accounting for the General, Special Revenue, and Capital Projects 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 reservations of fund balance since they do not constitute expenditures or liabilities. Outstanding encumbrances at year-end are automatically re-appropriated for the following year. Unencumbered and unexpended appropriations lapse at year-end unless City Council takes action in the form of a resolution to continue the appropriations into the following fiscal year.
City of San Marcos
Non-Major Governmental Funds
-102-
Special Revenue Funds
Special revenue funds are used to account for specific revenues t hat are legally restricted to expenditure for particular purposes.
The Gas Tax Fund is used to account for the Highway Us ers Tax revenues received from the State of California under Sections 2105, 2106, 2107, & 2107.5 of the Ca lifornia Streets and Highways Code. These funds are used by the Public Works Street Main tenance Division and are earmarked for the maintenance, rehabilitation or improvement of public streets.
The Traffic Safety Fund is used to account for traffic safety expenditures. Financing is provided by City-assessed traffic signal fees and traffic fines collected by the State.
The Community Facilities District 98-02 Fund is used to account for the costs of providing street lighting, traffic signals, and landscape services including parks, medians, parkways and trails, to certain properties. Properties wi thin the Community Facilities Di strict 98-02 are assessed for a portion of the annual costs and legally required operating and capital replacement reserves.
The Street Lighting District Fund is used to account for the cost s of providing street lighting and landscaping services to certain properties. The benefiting properti es are assessed for a portion of the costs.
The Senior Nutrition Grant Fund is used to account for Federal grant revenues received through the County of San Diego for the operations of the Senior Nutrition Program.
The Community Development Block Grant Fund is used to account for transactions related to the Community Development Block Grant Program pr ovided by the Federal Government. Funds are mostly utilized for capital improvement projects benefiting low and moderate income areas within the City.
The HOME Grant Fund is used to account for transactions re lated to the HOME Grant provided by the Federal Government. The grant is used to fund the San Marcos Mortgage Assistance Program.
The Center Drive Maintenance District Fund is used to account for the cost of providing street maintenance services to certain properties. The benefiting properti es are assessed for a portion of the costs.
The Art in Public Places Fund is used to account for public art in-lieu fee, which was created to assist in promoting art and cultural initiatives th at enrich the artistic and educational climate of the City. The City Council designated the San Marcos Community F oundation to implement a grant program, which makes available funding to eligible organizations implementi ng artistic and cultural events and/or activities that generally benefit the San Marcos community.
The Public, Education and Government Fund (PEG) is used to account for revenue received from local cable operators in San Marcos. PEG payments are calculated as 1 percent of gross receipts received by cable operators and may be used for c apital equipment purchases that support airing public meetings on the City’s PEG channel.
City of San Marcos
Non-Major Governmental Funds
-103-
Special Revenue Funds, (continued)
The Congestion Management CFD Fund is used to account for the fu ture costs of providing intra City public transportation services, facilities, and equipment. Properties within the CFD fund 2011-01 are assessed for a portion of the costs.
The CalHOME Grant Fund is used to account for transacti ons related to the CalHOME Grant provided by the State of Califor nia. The grant is used to hel p fund the San Marcos Mortgage Assistance Program.
The State CASp Fee Fund is used to account for the Cert ified Access Specialists (CASp) fee collected through business licenses. The CASp fee is mandated by the California SB 1186, AB 1379 and Government Code Section 4467 and its purpose is to increase disability access and compliance with construction-related accessibility requirements. The majority of t he fee is retained by the City to support the CASp program and the remainder is s ent to the California Department of General Services, Division of State Architect (DSA) to maintain oversight of the CASp program.
The Gas Tax RMRA Fund is used account for the Road Main tenance and Rehab ilitation (RMRA) revenues received from the State of California under the California Streets and Highways Code Section 2032. These funds are ear marked for specific capital im provement program projects involving the rehabilitation or improvement of public streets.
Debt Service Funds
Debt service funds are used to account for debt service transacti ons including revenue collection and payments of principal and interest on long-term obligations.
The San Marcos Public Facilities Authority Fund is used to account for the accumulation of resources for and the payment of principal and intere st of the various debt obligations of the San Marcos Public Facilities Authority.
Capital Projects Funds
Capital projects funds are used to account for the acquisition and construc tion of major capital facilities other than those financed by proprietary funds.
The Public Facility Fund is used to account for the accumula tion of resources for the payment of public facility related costs. The primary funding source is developer fees.
The Community Facilities District 99-1 Fund is used to account for the proceeds of bonds issued by the City of San Marcos Comm unity Facilities District 99-1 pursuant to the Mello-Roos Community Facilities Act of 1982. The proceeds are used to finance, refinance or provide reimbursement for the cost of land, buildings, equipment and other public capital improvements.
The Transportation Sales Tax Fund is used to account for rece ipts and expenditures of money associated with the widening of State Highway 78, local street s and roads maintenance, and other local public capital improvements.
City of San Marcos
Non-Major Governmental Funds
-104-
Capital Projects Funds, (continued)
The Community Facilities District 02-01 Fund is used to account for the proceeds of bonds issued by the City of San Marcos Community facilities District 02-01 pursuant to the Mello-Roos Community Facilities Act of 1982. The proceeds are used to finance, refinance or provide reimbursement for the cost of land, buildings, equipment and other public capital improvements.
The Transportation Impact Fee Fund is used to account for fees collected by the County of San Diego Department of Public Works for future road im provements as a result of indirect impacts of private developments occurring in the unincorporated area within the City’s boundaries. The fees will be used for qualifying congestion relief type improvements.
City of San Marcos
Combining Balance Sheet
Non-Major Governmental Funds
June 30, 2021
-105-
Debt Service
Fund
Total San Marcos Total Total
Special Public Capital Non-Major
Revenue Facilities Projects Governmental
Funds Authority Funds Funds
Cash and investments (note 2) 29,581,730 $ 222,551 $ 38,136,117$ 67,940,398 $ Cash and investments with fiscal agents (note 2) - 211,040 706,957 917,997 Receivables:
Taxes and special assessments 28,048 - - 28,048 Accounts 67,136 - 16,374 83,510 Interest 39,101 275 50,465 89,841 Notes, net (note 3) 2,241,304 - - 2,241,304 Other, net (note 4) - - 120,516 120,516 Due from other governments 1,113,889 - - 1,113,889 Total Assets 33,071,208 $ 433,866 $ 39,030,429$ 72,535,503 $
RESOURCES AND FUND BALANCES
Liabilities:
Accounts payable 1,071,031 $ - $ - $ 1,071,031$ Accrued liabilities 161,039 - 2,054 163,093 Due to other governments - - 9,300 9,300 Due to other funds (note 5) - - 267,661 267,661 Deposits payable 10,389 - - 10,389 Total Liabilities 1,242,459 - 279,015 1,521,474 Unavailable revenue (note 6) 2,261,948 - 136,890 2,398,838 Restricted:
Transportation 9,530,440 - 88,327 9,618,767 Lighting and landscaping 16,803,292 - - 16,803,292 Capital improvements - - 1,005,625 1,005,625 Public facilities - - 37,788,031 37,788,031 Other purposes 3,247,452 433,866 - 3,681,318 Unassigned (14,383) - (267,459) (281,842) Total Fund Balances 29,566,801 433,866 38,614,524 68,615,191 Total Liabilities, Deferred Inflows of
Resources and Fund Balances 33,071,208 $ 433,866 $ 39,030,429$ 72,535,503 $
LIABILITIES, DEFERRED INFLOWS OF
Deferred Inflows of Resources:
Fund Balances (Deficit):
ASSETS
City of San Marcos
Combining Statement of Revenues, Expenditures and Changes in Fund Balance Non-Major Governmental Funds
For the Year Ended June 30, 2021
-106-
Debt Service
Fund
Total San Marcos Total Total
Special Public Capital Non-Major
Revenue Facilities Projects Governmental
Funds Authority Funds Funds
REVENUES
Taxes and special assessments 9,253,728 $ - $ - $ 9,253,728$ Intergovernmental 5,196,012 - 4,781,474 9,977,486 Developer fees 93,412 - 5,657,315 5,750,727 Investment and rental income 96,534 552,135 113,092 761,761 Miscellaneous 140,644 - - 140,644 Total Revenues 14,780,330 552,135 10,551,881 25,884,346
EXPENDITURES
Current:
Community development 614,068 - - 614,068 Highways, streets and parks 8,279,689 - 138 8,279,827 Culture and recreation 357,526 - - 357,526 Capital outlay - - 66,309 66,309 Debt service:
Principal 90,201 320,000 - 410,201 Interest and fiscal charges 6,765 65,057 - 71,822 Total Expenditures 9,348,249 385,057 66,447 9,799,753 Excess (Deficiency) of Revenues
Over (Under) Expenditures 5,432,081 167,078 10,485,434 16,084,593
OTHER FINANCING SOURCES (USES)
Transfers in (note 5) 868,487 - - 868,487 Transfers out (note 5) (4,199,316) - (7,849,052) (12,048,368) Total Other Financing Sources (Uses) (3,330,829) - (7,849,052) (11,179,881) Net Change in Fund Balances 2,101,252 167,078 2,636,382 4,904,712 Fund Balances, Beginning 27,465,549 266,788 35,978,142 63,710,479 Fund Balances, Ending 29,566,801 $ 433,866 $ 38,614,524$ 68,615,191 $ City of San Marcos
Combining Balance Sheet
Non-Major Special Revenue Funds
June 30, 2021
-107-
Community Street Senior Community
Traffic Facilities Lighting Nutrition Development
Gas Tax Safety District 98-02 District Grant Block Grant Cash and investments 3,153,269 $ 1,153,891 $ 17,277,291 $ 136,532 $ 7,419 $ 59,173 $ Receivables:
Taxes and special assessments - - 21,553 2,212 - - Accounts - - 20,209 144 - - Interest 3,765 1,449 22,254 - - - Notes, net - - - - - - Due from other governments - 8,049 - - 10,192 767,251 Total Assets 3,157,034 $ 1,163,389 $ 17,341,307 $ 138,888 $ 17,611 $ 826,424 $
RESOURCES AND FUND BALANCES
Liabilities:
Accounts payable 49,296 $ 2,150 $ 467,146 $ 112,448 $ 22,616 $ 340,124 $ Accrued liabilities 70,301 - 70,880 7,231 9,378 3,220 Deposits payable - 10,389 - - - - Total Liabilities 119,597 12,539 538,026 119,679 31,994 343,344 Unavailable revenue - - 19,126 72 - - Restricted
Transportation 3,037,437 1,150,850 - - - - Lighting and landscaping - - 16,784,155 19,137 - - Other purposes - - - - - 483,080 Unassigned - - - - (14,383) - Total Fund Balances 3,037,437 1,150,850 16,784,155 19,137 (14,383) 483,080 Total Liabilities, Deferred Inflows of
Resources, and Fund Balances 3,157,034 $ 1,163,389 $ 17,341,307 $ 138,888 $ 17,611 $ 826,424 $ Fund Balances (Deficit):
Deferred Inflows of Resources:
LIABILITIES, DEFERRED INFLOWS OF
ASSETS
-108-
Center Drive Public, Congestion
HOME Maintenance Art in Education and Management CalHOME State Gas Tax Grant District Public Places Government CFD Grant CASp Fee RMRA Total 58,477$ 119,201 $ 1,056,533 $ 1,455,032 $ 3,046,334 $ 145,709 $ 75,682 $ 1,837,187$ 29,581,730 $ .
- 183 - - 4,100 - - - 28,048 - - - 43,864 2,919 - - - 67,136 - 164 1,325 1,848 3,794 - - 4,502 39,101 1,454,752 - - - - 786,552 - - 2,241,304 - - - - - - - 328,397 1,113,889 1,513,229$ 119,548 $ 1,057,858 $ 1,500,744 $ 3,057,147 $ 932,261 $ 75,682 $ 2,170,086$ 33,071,208 $ -$ 1,739 $ 73,501 $ - $ 1,443 $ - $ 568 $ - $ 1,071,031$ - - - - - - 29 - 161,039 - - - - - - - - 10,389 - 1,739 73,501 - 1,443 - 597 - 1,242,459 1,454,752 - - - 1,446 786,552 - - 2,261,948 - 117,809 - - 3,054,258 - - 2,170,086 9,530,440 - - - - - - - - 16,803,292 58,477 - 984,357 1,500,744 - 145,709 75,085 - 3,247,452 - - - - - - - - (14,383) 58,477 117,809 984,357 1,500,744 3,054,258 145,709 75,085 2,170,086 29,566,801 1,513,229$ 119,548 $ 1,057,858 $ 1,500,744 $ 3,057,147 $ 932,261 $ 75,682 $ 2,170,086$ 33,071,208 $
City of San Marcos
Combining Statement of Revenues, Expenditures and Changes in Fund Balance Non-Major Special Revenue Funds
For the Year Ended June 30, 2021
-109-
Community Street Senior Community
Traffic Facilities Lighting Nutrition Development
Gas Tax Safety District 98-02 District Grant Block Grant
REVENUES
Taxes and special assessments - $ - $ 7,740,325$ 530,709 $ - $ - $ Intergovernmental 2,138,302 98,699 - - 82,905 1,073,993 Developer fees - - - - - - Investment and rental income 10,430 1,799 36,988 - - - Miscellaneous - - - - 3,651 - Total Revenues 2,148,732 100,498 7,777,313 530,709 86,556 1,073,993
EXPENDITURES
Current:
Community development - - - - - 612,902 Highways, streets and parks 1,669,311 98,166 5,268,036 1,236,388 - - Culture and recreation - - - - 264,207 - Debt Service:
Principal - - 66,479 23,722 - - Interest and fiscal charges - - 4,986 1,779 - - Total Expenditures 1,669,311 98,166 5,339,501 1,261,889 264,207 612,902 Excess (Deficiency) of Revenues
Over (Under) Expenditures 479,421 2,332 2,437,812 (731,180) (177,651) 461,091
OTHER FINANCING SOURCES (USES)
Transfers in - - - 722,502 145,985 - Transfers out - (8,000) (738,647) - - (440,925) Total Other Financing Sources (Uses) - (8,000) (738,647) 722,502 145,985 (440,925) Net Change in Fund Balances 479,421 (5,668) 1,699,165 (8,678) (31,666) 20,166 Fund Balances, Beginning 2,558,016 1,156,518 15,084,990 27,815 17,283 462,914 Fund Balances (Deficit), Ending 3,037,437 $ 1,150,850 $ 16,784,155 $ 19,137 $ (14,383) $ 483,080 $
-110-
Center Drive Public, Congestion
HOME Maintenance Art in Education and Management CalHOME State Gas Tax Grant District Public Places Government CFD Grant CASp Fee RMRA Total -$ 27,325$ - $ 186,233$ 769,136 $ - $ - $ - $ 9,253,728$ - - - - - - - 1,802,113 5,196,012 - - 73,000 - - - 20,412 - 93,412 - 193 2,681 1,904 13,289 16,619 - 12,631 96,534 24,993 - - - - 112,000 - - 140,644 24,993 27,518 75,681 188,137 782,425 128,619 20,412 1,814,744 14,780,330 - - - - - - 1,166 - 614,068 - 2,592 - 2,638 2,558 - - - 8,279,689 - - 93,319 - - - - - 357,526 - - - - - - - - 90,201 - - - - - - - - 6,765 - 2,592 93,319 2,638 2,558 - 1,166 - 9,348,249 24,993 24,926 (17,638) 185,499 779,867 128,619 19,246 1,814,744 5,432,081 - - - - - - - - 868,487 - (12,042) - (26,995) - - - (2,972,707) (4,199,316) - (12,042) - (26,995) - - - (2,972,707) (3,330,829) 24,993 12,884 (17,638) 158,504 779,867 128,619 19,246 (1,157,963) 2,101,252 33,484 104,925 1,001,995 1,342,240 2,274,391 17,090 55,839 3,328,049 27,465,549 58,477$ 117,809 $ 984,357 $ 1,500,744 $ 3,054,258 $ 145,709 $ 75,085 $ 2,170,086$ 29,566,801 $
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City of San Marcos
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Gas Tax Special Revenue Fund
For the Year Ended June 30, 2021
-111-
Variance with
Original Final Actual Final Budget
REVENUES
Intergovernmental 2,476,828 $ 2,476,828 $ 2,138,302 $ (338,526) $ Investment and rental income 25,000 25,000 10,430 (14,570) Total Revenues 2,501,828 2,501,828 2,148,732 (353,096)
EXPENDITURES
Current:
Highways, streets and parks 1,769,463 1,918,907 1,669,311 249,596 Total Expenditures 1,769,463 1,918,907 1,669,311 249,596 Excess (deficiency) of
revenues over expenditures 732,365 582,921 479,421 (103,500)
OTHER FINANCING SOURCES (USES)
Transfers out - (2,648,411) - 2,648,411 Total other financing
sources (uses) - (2,648,411) - 2,648,411 Net Change in Fund Balance 732,365 (2,065,490) 479,421 2,544,911 Fund Balance, Beginning 2,558,016 2,558,016 2,558,016 - Fund Balance, Ending 3,290,381 $ 492,526 $ 3,037,437 $ 2,544,911 $ Budgeted Amounts
City of San Marcos
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Traffic Safety Special Revenue Fund
For the Year Ended June 30, 2021
-112-
Variance with
Original Final Actual Final Budget
REVENUES
Intergovernmental 150,000 $ 150,000 $ 98,699 $ (51,301) $ Investment and rental income 22,000 22,000 1,799 (20,201) Total Revenues 172,000 172,000 100,498 (71,502)
EXPENDITURES
Current:
Highways, streets and parks 185,000 278,788 98,166 180,622 Total Expenditures 185,000 278,788 98,166 180,622 Excess (deficiency) of
revenues over expenditures (13,000) (106,788) 2,332 109,120
OTHER FINANCING SOURCES (USES)
Transfers out - (100,000) (8,000) 92,000 Total other financing
sources (uses) - (100,000) (8,000) 92,000 Net Change in Fund Balance (13,000) (206,788) (5,668) 201,120 Fund Balance, Beginning 1,156,518 1,156,518 1,156,518 - Fund Balance, Ending 1,143,518 $ 949,730 $ 1,150,850 $ 201,120 $ Budgeted Amounts
City of San Marcos
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Community Facilities District 98-02 Special Revenue Fund For the Year Ended June 30, 2021
-113-
Variance with
Original Final Actual Final Budget
REVENUES
Taxes and special assessments 7,795,318 $ 7,795,318 $ 7,740,325 $ (54,993) $ Investment and rental income 106,000 106,000 36,988 (69,012) Miscellaneous 10,000 10,000 - (10,000) Total Revenues 7,911,318 7,911,318 7,777,313 (134,005)
EXPENDITURES
Current:
Highways, streets and parks 5,852,561 5,961,891 5,268,036 693,855 Debt Service:
Principal 65,166 65,166 66,479 (1,313) Interest and fiscal charges 6,299 6,299 4,986 1,313 Total Expenditures 5,924,026 6,033,356 5,339,501 693,855 Excess of Revenues Over
Expenditures 1,987,292 1,877,962 2,437,812 559,850
OTHER FINANCING SOURCES (USES)
Transfers out (288,660) (741,695) (738,647) 3,048 Total Other Financing
Sources (Uses) (288,660) (741,695) (738,647) 3,048 Net Change in Fund Balance 1,698,632 1,136,267 1,699,165 562,898 Fund Balance, Beginning 15,084,990 15,084,990 15,084,990 - Fund Balance, Ending 16,783,622 $ 16,221,257 $ 16,784,155 $ 562,898 $ Budgeted Amounts
City of San Marcos
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Street Lighting District Special Revenue Fund
For the Year Ended June 30, 2021
-114-
Variance with
Original Final Actual Final Budget
REVENUES
Taxes and special assessments 530,000 $ 530,000 $ 530,709 $ 709 $ Total Revenues 530,000 530,000 530,709 709
EXPENDITURES
Current:
Highways, streets and parks 1,164,497 1,142,715 1,236,388 (93,673) Debt Service:
Principal 23,255 23,255 23,722 (467) Interest and fiscal charges 2,248 2,248 1,779 469 Total Expenditures 1,190,000 1,168,218 1,261,889 (93,671) Excess of Revenues Over (Under)
Expenditures (660,000) (638,218) (731,180) (92,962)
OTHER FINANCING SOURCES
Transfers in 660,000 722,502 722,502 - Total Other Financing
Sources 660,000 722,502 722,502 - Net Change in Fund Balance - 84,284 (8,678) (92,962) Fund Balance, Beginning 27,815 27,815 27,815 - Fund Balance, Ending 27,815 $ 112,099 $ 19,137 $ (92,962) $ Budgeted Amounts
City of San Marcos
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Senior Nutrition Grant Special Revenue Fund
For the Year Ended June 30, 2021
-115-
Variance with
Original Final Actual Final Budget
REVENUES
Intergovernmental 65,000 $ 65,000 $ 82,905 $ 17,905 $ Investment and rental income 400 400 - (400) Miscellaneous 30,700 30,700 3,651 (27,049) Total Revenues 96,100 96,100 86,556 (9,544)
EXPENDITURES
Current:
Culture and recreation 327,114 405,884 264,207 141,677 Total Expenditures 327,114 405,884 264,207 141,677 Excess of Revenues (Deficiency)
Over (Under) Expenditures (231,014) (309,784) (177,651) 132,133
OTHER FINANCING SOURCES (USES)
Transfers in 183,000 183,000 145,985 (37,015) Total Other Financing
Sources (Uses) 183,000 183,000 145,985 (37,015) Net Change in Fund Balance (48,014) (126,784) (31,666) 95,118 Fund Balance, Beginning 17,283 17,283 17,283 - Fund Balance (Deficit), Ending (30,731) $ (109,501) $ (14,383) $ 95,118 $ Budgeted Amounts
City of San Marcos
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Community Development Block Grant Special Revenue Fund
For the Year Ended June 30, 2021
-116-
Variance with
Original Final Actual Final Budget
REVENUES
Intergovernmental 1,504,023 $ 1,895,397 $ 1,073,993 $ (821,404) $ Total Revenues 1,504,023 1,895,397 1,073,993 (821,404)
EXPENDITURES
Current:
Community development 198,042 281,770 612,902 (331,132) Total Expenditures 198,042 281,770 612,902 (331,132) Excess (deficiency) of
revenues over expenditures 1,305,981 1,613,627 461,091 (1,152,536)
OTHER FINANCING SOURCES (USES)
Transfers out - (1,518,638) (440,925) 1,077,713 Total other financing
sources (uses) - (1,518,638) (440,925) 1,077,713 Net Change in Fund Balance 1,305,981 94,989 20,166 (74,823) Fund Balance, Beginning 462,914 462,914 462,914 - Fund Balance, Ending 1,768,895 $ 557,903 $ 483,080 $ (74,823) $ Budgeted Amounts
City of San Marcos
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Center Drive Maintenance District Special Revenue Fund
For the Year Ended June 30, 2021
-117-
Variance with
Original Final Actual Final Budget
REVENUES
Taxes and special assessments 30,000 $ 30,000 $ 27,325 $ (2,675) $ Investment and rental income 2,000 2,000 193 (1,807) Total Revenues 32,000 32,000 27,518 (4,482)
EXPENDITURES
Current:
Highways, streets and parks 27,000 27,000 2,592 24,408 Total Expenditures 27,000 27,000 2,592 24,408 Excess of Revenues Over
Expenditures 5,000 5,000 24,926 19,926
OTHER FINANCING SOURCES (USES)
Transfers out (6,500) (20,500) (12,042) 8,458 Total Other Financing
Sources (Uses) (6,500) (20,500) (12,042) 8,458 Net Change in Fund Balance (1,500) (15,500) 12,884 28,384 Fund Balance, Beginning 104,925 104,925 104,925 - Fund Balance, Ending 103,425 $ 89,425 $ 117,809 $ 28,384 $ Budgeted Amounts
City of San Marcos
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Art in Public Places Special Revenue Fund
For the Year Ended June 30, 2021
-118-
Variance with
Original Final Actual Final Budget
REVENUES
Developer fees 60,000 $ 60,000 $ 73,000 $ 13,000 $ Investment and rental income 13,000 13,000 2,681 (10,319) Total Revenues 73,000 73,000 75,681 2,681
EXPENDITURES
Current:
Culture and recreation 200,000 200,000 93,319 106,681 Total Expenditures 200,000 200,000 93,319 106,681 Net Change in Fund Balance (127,000) (127,000) (17,638) 109,362 Fund Balance, Beginning 1,001,995 1,001,995 1,001,995 - Fund Balance, Ending 874,995 $ 874,995 $ 984,357 $ 109,362 $ Budgeted Amounts
City of San Marcos
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Public, Education and Government Special Revenue Fund
For the Year Ended June 30, 2021
-119-
Variance with
Original Final Actual Final Budget
REVENUES
Taxes and special assessments 180,000$ 180,000 $ 186,233 $ 6,233 $ Investment and rental income 23,000 23,000 1,904 (21,096) Total Revenues 203,000 203,000 188,137 (14,863)
EXPENDITURES
Current:
Highways, streets and parks 100,000 100,000 - 100,000 Capital outlay - - 2,638 (2,638) Total Expenditures 100,000 100,000 2,638 97,362 Excess (deficiency) of
revenues over expenditures 103,000 103,000 185,499 82,499
OTHER FINANCING SOURCES
(USES)
Transfers out - (310,405) (26,995) 283,410 Total other financing
sources (uses) - (310,405) (26,995) 283,410 Net Change in Fund Balance 103,000 (207,405) 158,504 365,909 Fund Balance, Beginning 1,342,240 1,342,240 1,342,240 - Fund Balance, Ending 1,445,240 $ 1,134,835 $ 1,500,744 $ 365,909 $ Budgeted Amounts
City of San Marcos
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Congestion Management CFD Special Revenue Fund
For the Year Ended June 30, 2021
-120-
Variance with
Original Final Actual Final Budget
REVENUES
Taxes and special assessments 595,299$ 595,299 $ 769,136 $ 173,837 $ Investment and rental income 15,000 15,000 13,289 (1,711) Total Revenues 610,299 610,299 782,425 172,126
EXPENDITURES
Current:
Highway, streets and parks 25,030 25,030 2,558 22,472 Total expenditures 25,030 25,030 2,558 22,472 Net Change in Fund Balance 585,269 585,269 779,867 194,598 Fund Balance, Beginning 2,274,391 2,274,391 2,274,391 - Fund Balance, Ending 2,859,660 $ 2,859,660 $ 3,054,258 $ 194,598 $ Budgeted Amounts
City of San Marcos
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual CalHOME Grant Special Revenue Fund
For the Year Ended June 30, 2021
-121-
Variance with
Original Final Actual Final Budget
REVENUES
Investment and rental income 26,000 $ 208,000 $ 16,619 $ (191,381) $ Miscellaneous - - 112,000 112,000 Total Revenues 26,000 208,000 128,619 (79,381)
EXPENDITURES
Current:
Community development 56,350 168,350 - 168,350 Total Expenditures 56,350 168,350 - 168,350 Net Change in Fund Balance (30,350) 39,650 128,619 88,969 Fund Balance, Beginning 17,090 17,090 17,090 - Fund Balance, Ending (13,260) $ 56,740 $ 145,709 $ 88,969 $ Budgeted Amounts
City of San Marcos
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual CASp Fee Special Revenue Fund
For the Year Ended June 30, 2021
-122-
Variance with
Original Final Actual Final Budget
REVENUES
Developer fees 15,000 $ 15,000 $ 20,412 $ 5,412 $ Total Revenues 15,000 15,000 20,412 5,412
EXPENDITURES
Current:
Community development 1,000 1,000 1,166 (166) Total Expenditures 1,000 1,000 1,166 (166) Net Change in Fund Balance 14,000 14,000 19,246 5,246 Fund Balance, Beginning - 55,839 55,839 - Fund Balance, Ending 14,000 $ 69,839 $ 75,085 $ 5,246 $ Budgeted Amounts
City of San Marcos
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Gas Tax RMRA Special Revenue Fund
For the Year Ended June 30, 2021
-123-
Variance with
Original Final Actual Final Budget
REVENUES
Intergovernmental 1,857,880 $ 1,857,880 $ 1,802,113 $ (55,767) $ Investment and rental income 9,000 9,000 12,631 3,631 Total Revenues 1,866,880 1,866,880 1,814,744 (52,136)
OTHER FINANCING SOURCES (USES)
Transfers out - (4,700,162) (2,972,707) 1,727,455 Total other financing
sources (uses) - (4,700,162) (2,972,707) 1,727,455 Net Change in Fund Balances 1,866,880 (2,833,282) (1,157,963) 1,675,319 Fund Balances, Beginning 3,328,049 3,328,049 3,328,049 - Fund Balances, Ending 5,194,929 $ 494,767 $ 2,170,086 $ 1,675,319 $ Budgeted Amounts
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City of San Marcos
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual San Marcos Public Facilities Authority Debt Service Fund For the Year Ended June 30, 2021
-124-
Variance with
Original Final Actual Final Budget
REVENUES
Investment and rental income 517,000 $ 517,000 $ 552,135 $ 35,135 $ Total Revenues 517,000 517,000 552,135 35,135
EXPENDITURES
Debt service:
Principal 320,000 320,000 320,000 - Interest and fiscal charges 65,057 65,057 65,057 - Total Expenditures 385,057 385,057 385,057 - Net Change in Fund Balance 131,943 131,943 167,078 35,135 Fund Balance, Beginning 266,788 266,788 266,788 - Fund Balance, Ending 398,731 $ 398,731 $ 433,866 $ 35,135 $ Budgeted Amounts
City of San Marcos
Combining Balance Sheet
Non-Major Capital Projects Funds
June 30, 2021
-125-
Community
Public Facilities Transportation
Facility District 99-1 Sales Tax
Cash and investments 37,749,607 $ 5,509 $ - $ Cash and investments with
fiscal agents - 706,957 - Receivables:
Accounts 16,374 - -
Interest 49,640 7 340 Other, net 120,516 - - Total Assets 37,936,137 $ 712,473 $ 340 $
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCES
Accrued liabilities 1,916 $ - $ 138 $ Due to other governments 9,300 - - Due to other funds - - 267,661 Total Liabilities 11,216 - 267,799 Unavailable revenue 136,890 - - Restricted:
Transportation - - - Capital improvements - 712,473 - Public facilities 37,788,031 - - Unassigned - - (267,459) Total Fund Balances 37,788,031 712,473 (267,459) Total Liabilities, Deferred Inflows of
Resources and Fund Balances 37,936,137$ 712,473 $ 340 $ Liabilities:
Deferred Inflows of Resources:
Fund Balances (Deficit):
ASSETS
-126-
Community
Facilities Transportation
District 02-01 Impact Fee Total
292,785$ 88,216 $ 38,136,117$
- - 706,957
- - 16,374
367 111 50,465
- - 120,516
293,152$ 88,327 $ 39,030,429$
-$ - $ 2,054 $
- - 9,300
- - 267,661
- - 279,015
- - 136,890
- 88,327 88,327
293,152 - 1,005,625
- - 37,788,031
- - (267,459)
293,152 88,327 38,614,524
293,152$ 88,327 $ 39,030,429$
City of San Marcos
Combining Statement of Revenues, Expenditures and Changes in Fund Balance Non-Major Capital Projects Funds
For the Year Ended June 30, 2021
-127-
Community
Public Facilities Transportation
Facility District 99-1 Sales Tax
REVENUES
Intergovernmental - $ - $ 4,781,474$ Developer fees 5,657,315 - - Investment and rental income 109,536 131 2,532 Total Revenues 5,766,851 131 4,784,006
EXPENDITURES
Current:
Highways, streets and parks - - 138 Capital outlay 66,309 - - Total Expenditures 66,309 - 138 Excess (Deficiency) of Revenues
Over (Under) Expenditures 5,700,542 131 4,783,868
OTHER FINANCING SOURCES
Transfers out (note 5) (4,389,446) - (3,459,606) Total Other Financing Sources (4,389,446) - (3,459,606) Net Change in Fund Balances 1,311,096 131 1,324,262 Fund Balances (Deficit), Beginning 36,476,935 712,342 (1,591,721) Fund Balances (Deficit), Ending 37,788,031 $ 712,473 $ (267,459) $
-128-
Community
Facilities Transportation
District 02-01 Impact Fee Total
-$ - $ 4,781,474$
- - 5,657,315
686 207 113,092
686 207 10,551,881 - - 138
- - 66,309
- - 66,447
686 207 10,485,434 - - (7,849,052)
- - (7,849,052)
686 207 2,636,382
292,466 88,120 35,978,142
293,152$ 88,327 $ 38,614,524$
City of San Marcos
Combining Statement of Fiduciary Net Position
Custodial Funds
June 30, 2021
-129-
Community Community Community Total
Facilities Facilities Facilities Custodial
District 88-1 District 99-1 District 02-01 Funds
Cash and investments (note 2) 101 $ - $ - $ 101 $ Receivables:
Special assessments 5,250 15,374 1,307 21,931 Interest 4 15 1 20 Restricted Assets:
Cash and investments with
fiscal agents (note 2) 2,667,927 6,093,324 1,077,361 9,838,612 Total Assets 2,673,282 6,108,713 1,078,669 9,860,664 Accounts payable 161,372 - - 161,372 Due to other governments 4,018 3,643 9,619 17,280 Total Liabilities 165,390 3,643 9,619 178,652 Restricted for:
Other taxing entities and other agencies 2,507,892 $ 6,105,070 $ 1,069,050 $ 9,682,012 $
LIABILITIES
NET POSITION (DEFICIT)
Custodial Funds
ASSETS
City of San Marcos
Combining Statement of Changes in Fiduciary Net Position Custodial Funds
For the Year Ended June 30, 2021
-130-
Community Community Community Total
Facilities Facilities Facilities Custodial
District 88-1 District 99-1 District 02-01 Funds
ADDITIONS
Income from property and investments 174 $ 41,891$ 20,260 $ 62,325 $ Tax collections for other agencies 1,366,805 5,158,224 1,070,652 7,595,681 Debt proceeds collected for other agencies - 9,720,000 10,575,000 20,295,000 Other revenue - 21,764 - 21,764 Total Additions 1,366,979 14,941,879 11,665,912 27,974,770
DEDUCTIONS
Adminitrative expense 198,201 778,008 264,393 1,240,602 Payments to fiscal agent on behalf
of other agencies 1,224,675 15,192,239 12,253,417 28,670,331 Total Deductions 1,422,876 15,970,247 12,517,810 29,910,933 Change in Net Position (55,897) (1,028,368) (851,898) (1,936,163) Net Position, Beginning, as restated 2,563,789 7,133,438 1,920,948 11,618,175 Net Position, Ending 2,507,892 $ 6,105,070 $ 1,069,050 $ 9,682,012 $ Custodial Funds
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City of San Marcos
Statistical Section
-131-
This section of the City’s annual comprehensive financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the government’s overall financial health.
Page
Financial Trends 133
Revenue Capacity 143
Debt Capacity 146
Demographic and Economic Information 152
Operating Information 156
These schedules contain service and infastructure data to help the reader understand how the information in the City's financial report relates to the services the government provides and the activities it performs.
CONTENTS
These schedules contain trend information to help the reader understand how the City's financial performance and well being have changed over time.
These schedules contain information to help the reader assess one of the City's most significant local revenue source, the property tax.
These schedules present information to help the reader assess the affordability of the City's current levels of outstanding debt and its ability to issue additional debt in the future.
These schedules offer demographic and economic indicators to help the reader understand the environment within which the City's financial activities take palce.
Sources: Unless otherwise noted, the information in these schedules is derived from the annual comprehensive financial reports for the relevant year.
City of San Marcos
Net Position by Component
Last Ten Fiscal Years
(accrual basis of accounting)
-132-
Fiscal Year
2012 2013 2014 2015
Governmental Activities:
Net investment in capital assets 658,296,750 $ 646,769,141 $ 671,633,533 $ 647,192,005 $ Restricted for:
Affordable housing 163,429,723 160,939,069 162,388,168 174,239,971 Lighting and landscape 9,389,874 9,706,762 10,141,062 11,266,533 Capital improvements - 20,320,721 21,071,049 24,998,414 Other purposes 6,506,958 10,295,075 8,955,235 7,645,829 Endowment 1,147,835 1,195,768 1,000,000 1,000,000 Unrestricted 64,955,219 57,252,131 60,074,433 3,482,542 Total governmental activities net position 903,726,359$ 906,478,667 $ 935,263,480 $ 869,825,294 $ Business-type activities:
Net investment in capital assets 27,925,065 $ 26,725,626 $ 27,160,354 $ 34,101,091 $ Unrestricted 6,319,042 5,761,171 4,352,951 2,552,732 Total business-type activities net position 34,244,107$ 32,486,797 $ 31,513,305 $ 36,653,823 $ Component unit:
Not expendable - $ - $ - $ - $ Expendable - - - - Total component unit net position - $ - $ - $ - $ Primary Government:
Net investment in capital assets 686,221,815 $ 673,494,767 $ 698,793,887 $ 681,293,096 $ Restricted for:
Affordable housing 163,429,723 160,939,069 162,388,168 174,239,971 Lighting and landscape 9,389,874 9,706,762 10,141,062 11,266,533 Capital improvements - 20,320,721 21,071,049 24,998,414 Other purposes 6,506,958 10,295,075 8,955,235 7,645,829 Endowment 1,147,835 1,195,768 1,000,000 1,000,000 Unrestricted 71,274,261 63,013,302 64,427,384 6,035,274 Total primary government net position 937,970,466$ 938,965,464 $ 966,776,785 $ 906,479,117 $ Component unit:
Restricted - $ - $ - $ - $ Total component unit net position - $ - $ - $ - $ Source: City of San Marcos, Finance Department
-133-
Fiscal Year
2016 2017 2018 2019 2020 2021
623,187,760$ 607,795,162 $ 599,739,265 $ 600,656,145 $ 594,590,985 $ 591,038,322 $ 182,174,655 192,984,712 197,267,954 204,874,361 214,394,691 222,040,542 12,073,491 12,410,105 12,833,499 14,734,771 15,104,188 16,803,353 32,111,994 36,384,666 3,186,646 1,008,537 1,004,808 1,005,625 2,187,164 2,461,175 44,845,897 42,359,172 51,842,888 54,134,938 - - - - - - 48,523,274 60,067,467 48,322,111 46,006,938 35,895,754 35,934,735 900,258,338$ 912,103,287 $ 906,195,372 $ 909,639,924 $ 912,833,314 $ 920,957,515 $ -$ - $ - $ - $ - $ - $ 94,924,105 95,225,519 94,972,155 95,293,994 96,901,655 97,147,813 94,924,105$ 95,225,519 $ 94,972,155 $ 95,293,994 $ 96,901,655 $ 97,147,813 $ 1,000,000$ 1,000,000 $ 1,000,000 $ 1,000,000 $ 1,000,000 $ 1,000,000 $ 157,923 230,885 258,593 250,742 219,405 475,316 1,157,923$ 1,230,885 $ 1,258,593 $ 1,250,742 $ 1,219,405 $ 1,475,316 $ 623,187,760$ 607,795,162 $ 599,739,265 $ 600,656,145 $ 594,590,985 $ 591,038,322 $ 182,174,655 192,984,712 197,267,954 204,874,361 214,394,691 222,040,542 12,073,491 12,410,105 12,833,499 14,734,771 15,104,188 16,803,353 32,111,994 36,384,666 3,186,646 1,008,537 1,004,808 1,005,625 2,187,164 2,461,175 44,845,897 42,359,172 51,842,888 54,134,938 - - - - - - 143,447,379 155,292,986 143,294,266 141,300,932 132,797,409 133,082,548 995,182,443$ 1,007,328,806 $ 1,001,167,527 $ 1,004,933,918 $ 1,009,734,969 $ 1,018,105,328 $ 1,157,923$ 1,230,885 $ 1,258,593 $ 1,250,742 $ 1,219,405 $ 1,475,316 $ 1,157,923$ 1,230,885 $ 1,258,593 $ 1,250,742 $ 1,219,405 $ 1,475,316 $
City of San Marcos
Changes in Net Position
Last Ten Fiscal Years
(accrual basis of accounting)
-134-
Fiscal Year
2012 2013 2014 2015
Expenses:
Governmental Activities:
General government 16,992,317 $ 15,885,771 $ 16,447,263 $ 16,944,647 $ Community development 28,586,547 6,379,029 3,431,958 7,094,841 Public safety 32,163,467 27,531,474 31,398,530 36,059,952 Highways, streets and parks 22,057,522 31,047,726 32,779,655 33,832,005 Culture and recreation 3,163,230 4,992,567 3,022,930 5,040,297 Interest on long-term debt 9,399,083 286,343 272,403 267,688 Total governmental activities expenses 112,362,166 86,122,910 87,352,739 99,239,430 Business-type activities:
Creekside Marketplace 1,060,528 866,501 1,061,134 2,053,600 Total business-type activities expenses 1,060,528 866,501 1,061,134 2,053,600 Total primary government expenses 113,422,694 86,989,411 88,413,873 101,293,030 Component Unit:
Permanent Fund Community
Foundation - - - - Total primary government expenses - $ - $ - $ - $ Program Revenues:
Governmental Activities:
Charges for services:
General government
(2) 7,569,325$ 8,616,200 $ 7,515,771 $ 1,288,995 $ Community development (2) 2,131,886 5,179,421 6,998,956 2,997,665 Public safety 7,266,747 8,012,187 8,636,601 8,888,703 Highways, streets and parks (1) (2) 7,150,548 6,943,057 8,462,005 7,455,240 Culture and recreation (2) 1,837,906 1,878,137 2,105,349 2,081,035 Operating grants and contributions 3,547,679 3,333,506 24,338,152 16,811,188 Capital contributions and grants 15,027,697 20,273,816 2,125,409 9,843,740 Total governmental activities program revenues 44,531,788 54,236,324 60,182,243 49,366,566 Business-type activities:
Charges for services:
Creekside Marketplace 3,523,109 3,907,546 4,103,722 3,470,369 Total business-type activities program revenues 3,523,109 3,907,546 4,103,722 3,470,369 Total primary government program revenues 48,054,897 58,143,870 64,285,965 52,836,935 Net (expenses) revenues:
Governmental activities (67,830,378) (31,886,586) (27,170,496) (49,872,864) Business-type activities 2,462,581 3,041,045 3,042,588 1,416,769 Total primary government net (expenses)/revenues (65,367,797)$ (28,845,541) $ (24,127,908) $ (48,456,095) $ Component Unit:
Permanent Fund Community
Foundation - - - - Total primary government net (expenses)/revenues - - - - Notes:
(1) Amounts have been restated to reflect lighting and landscaping expenditures as part of highways, streets, and parks instead of culture and recreation.
(2) Beginning in fiscal year 2009-2010, all costs relating to the construction inspection function are reported under community development instead of highways, streets, and parks. Also, the storm water management function is under general government instead of highways, streets, and parks.
Source: City of San Marcos, Finance Department
-135-
Fiscal Year
2016 2017 2018 2019 2020 2021
18,256,401$ 15,819,492 $ 19,444,881 $ 24,545,665 $ $26,598,227 $24,133,604 12,890,498 1,679,942 6,368,611 5,036,267 10,631,212 13,174,383 32,564,134 38,312,609 40,504,526 42,703,434 42,461,674 45,837,054 23,904,189 29,012,619 32,201,548 31,533,558 32,356,482 33,373,256 3,951,699 3,873,784 4,209,685 4,025,485 3,982,454 3,557,335 262,067 243,974 295,292 183,847 227,552 259,529 91,828,988 88,942,420 103,024,543 108,028,256 116,257,601 120,335,161 2,069,680 1,572,337 771,106 969,539 1,339,226 974,272 2,069,680 1,572,337 771,106 969,539 1,339,226 974,272 93,898,668 90,514,757 103,795,649 108,997,795 117,596,827 121,309,433 56,622 65,283 69,946 71,223 51,361 84,837 56,622$ 65,283 $ 69,946 $ 71,223 $ 51,361 $ 84,837 $ 1,843,724$ 1,151,920 $ 1,038,094 $ 1,704,211 $ 1,580,692 $ 1,447,664 $ 2,252,007 4,554,470 6,363,423 2,485,165 1,813,367 2,499,892 9,103,730 10,358,412 10,979,615 12,001,681 11,883,120 13,464,941 8,196,772 7,931,273 8,605,163 7,860,930 9,294,971 9,658,671 2,364,561 2,575,892 2,100,449 2,466,095 1,543,846 946,994 11,893,755 13,919,753 11,094,309 17,606,841 23,979,367 24,626,457 4,294,066 3,523,253 1,345,661 4,437,779 7,053,470 22,305,574 39,948,615 44,014,973 41,526,714 48,562,702 57,148,833 74,950,193 3,335,509 4,924,764 5,188,034 5,510,983 4,808,776 4,617,947 3,335,509 4,924,764 5,188,034 5,510,983 4,808,776 4,617,947 43,284,124 48,939,737 46,714,748 54,073,685 61,957,609 79,568,140 (51,880,373) (44,927,447) (61,497,829) (59,465,554) (59,108,768) (45,384,968) 1,265,829 3,352,427 4,416,928 4,541,444 3,469,550 3,643,675 (50,614,544)$ (41,575,020) $ (57,080,901) $ (54,924,110) $ (55,639,218) $ (41,741,293) $ (56,622) (65,283) (69,946) (71,223) (51,361) (84,837) (56,622) (65,283) (69,946) (71,223) (51,361) (84,837)
City of San Marcos
Changes in Net Position, (continued)
Last Ten Fiscal Years
(accrual basis of accounting)
-136-
Fiscal Year
2012 2013 2014 2015
General Revenues and Other Changes in Net
Positions:
Governmental activities:
Taxes:
Property taxes 12,373,080 $ 12,734,479 $ 19,036,135 $ 14,730,525 $ Tax increment, net 36,294,755 11,896,531 - - Transient occupancy taxes 610,460 713,538 736,035 794,846 Business license 195,134 195,431 194,864 208,911 Franchise fees 2,677,551 2,713,099 2,582,279 3,520,613 Gain/(Loss) on sale of capital assets 67,970 - - (659,841) Motor vehicle license fees 382,275 42,071 80,791 - Rental income - - - 6,260,337 Sales tax shared state revenue and in lieu, unrestricted 13,091,860 13,836,852 14,596,011 15,840,511 Investment income 4,583,907 3,692,241 3,508,350 1,108,705 Other 1,390,381 1,160,059 1,991,861 489,778 Transfers 3,167,000 5,100,000 5,000,000 4,250,000 Transfer to Successor Agency - - (10,674,712) - Extraordinary gain - 280,624,874 - - Total governmental activities 74,834,373 332,709,175 37,051,614 46,544,385 Business-type activities:
Investment income 167,380 137,198 5,469 50,190 Other - - - - Transfers (3,167,000) (5,100,000) (5,000,000) (4,250,000) Total business-type activities (2,999,620) (4,962,802) (4,994,531) (4,199,810) Total primary government 71,834,753 327,746,373 32,057,083 42,344,575 Component Unit:
Investment income, restricted - - - - Other - - - - Total primary government - - - - Change in Net Position:
Governmental activities 7,003,995 300,822,589 9,881,118 (3,328,479) Business-type activities (537,039) (1,921,757) (1,951,943) (2,783,041) Total primary government 6,466,956 $ 298,900,832 $ 7,929,175 $ (6,111,520) $ Component Unit:
Permanent Fund Community
Foundation - - - - Total primary government - $ - $ - $ - $ Source: City of San Marcos, Finance Department
-137-
Fiscal Year
2016 2017 2018 2019 2020 2021
16,627,912$ 18,604,256 $ 19,825,953 $ 21,542,823 $ 24,982,707 $ 24,980,971 $ - - - - - - 829,724 873,863 978,498 1,303,446 1,068,175 871,393 213,173 228,040 231,933 232,733 226,950 230,340 3,907,803 4,031,275 3,897,771 4,042,123 4,282,862 4,220,898 1,810,932 187,956 227,020 258,282 229,032 (74,079) - - - 49,502 79,818 72,985 5,790,384 5,950,030 5,556,365 5,477,226 5,140,403 7,290,221 16,209,302 16,868,051 16,418,302 17,274,843 19,306,999 17,308,573 937,647 1,731,178 1,242,804 1,305,351 10,303,109 2,031,411 982,947 529,653 96,331 223,593 982,103 1,026,771 (3,850,425) 4,500,000 3,317,138 5,000,000 3,500,000 3,400,000 - - - - - - - - - - - - 43,459,399 53,504,302 51,792,115 56,709,922 70,102,158 61,359,484 8,184 16,289 2,855 6,759 1,636,309 2,483 - - - - 1,802 - 3,850,425 (4,500,000) (3,317,138) (5,000,000) (3,500,000) (3,400,000) 3,858,609 (4,483,711) (3,314,283) (4,993,241) (1,861,889) (3,397,517) 47,318,008 49,020,591 48,477,832 51,716,681 68,240,269 57,961,967 - (11,645) 138,220 97,654 19,998 340,748 - - 25 - 26 - - (11,645) 138,245 97,654 20,024 340,748 (8,420,974) 8,576,855 (9,705,714) (2,755,632) 10,993,390 15,974,516 5,124,438 (1,131,284) 1,102,645 (451,797) 1,607,661 246,158 (3,296,536)$ 7,445,571 $ (8,603,069) $ (3,207,429) $ 12,601,051 $ 16,220,674 $ - (76,928) 68,299 26,431 (31,337) 255,911 -$ (76,928)$ 68,299 $ 26,431 $ (31,337) $ 255,911 $
City of San Marcos
Fund Balances of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
-138-
2012 2013 2014 2015
Nonspendable 16,924,452 $ 16,184,816 $ 11,938,509 $ 10,451,246 $ Restricted - - - - Assigned - - - 5,984,790 Unassigned 34,951,893 44,147,436 51,115,898 31,887,837 Total General Fund 51,876,345 60,332,252 63,054,407 48,323,873 Nonspendable 1,147,835 1,195,768 1,000,000 1,000,000 Restricted 81,486,140 80,423,049 80,658,598 82,000,192 Unassigned - - (225) (20) Total all other governmental funds 82,633,975 81,618,817 81,658,373 83,000,172 Total governmental funds 134,510,320 $ 141,951,069 $ 144,712,780 $ 131,324,045 $ Source: City of San Marcos, Finance Department
Fiscal Year
-139-
Fiscal Year
2016 2017 2018 2019 2020 2021
10,031,405$ 66,369,312 $ 65,059,911 $ 64,997,746 $ 62,506,999 $ 61,913,706 $ - - - - 2,492,150 2,889,350 5,984,790 11,653,634 11,313,621 11,059,665 10,023,351 11,864,630 82,608,491 27,053,317 28,500,274 30,443,892 32,505,397 40,069,078 98,624,686 105,076,263 104,873,806 106,501,303 107,527,897 116,736,764 - - - - - - 82,451,468 87,132,962 98,836,674 99,243,047 110,557,067 109,842,378 (33,867) - (148,263) (378,551) (5,099,687) (11,385,046) 82,417,601 87,132,962 98,688,411 98,864,496 105,457,380 98,457,332 181,042,287$ 192,209,225 $ 203,562,217 $ 205,365,799 $ 212,985,277 $ 215,194,096 $
City of San Marcos
Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
-140-
2012 2013 2014 2015
Revenues:
Taxes and special assessments (3) 44,811,128 $ 40,050,764 $ 37,499,452 $ 40,746,406 $ Licenses and permits 5,210,749 5,031,124 4,834,181 4,896,092 Intergovernmental (3) 14,657,647 16,273,969 14,879,876 11,705,953 Charges for services 13,430,631 14,423,983 14,014,737 14,767,944 Developer fees 8,822,043 12,333,859 604,325 3,085,839 Fines and forfeitures 203,253 171,675 379,517 378,143 Investment and rental income 8,710,563 8,108,512 8,390,525 9,159,541 Miscellaneous 2,020,386 1,656,624 2,784,337 1,307,048 Total Revenues 97,866,400 98,050,510 83,386,950 86,046,966 Expenditures:
Current:
General government (2) 15,640,014 15,237,915 15,683,539 16,082,210 Community development (2) 17,717,361 9,148,706 4,209,639 7,282,130 Public safety 30,262,221 27,156,685 30,863,346 35,743,282 Highways, streets and parks (1) (2) 14,053,498 13,407,088 21,875,374 20,669,923 Culture and recreation (1) 2,984,215 4,819,380 2,948,559 4,904,494 Tax increment distrib. to other gov. agencies 410,877 - - - SERAF payment - - - - Capital outlay 20,163,235 16,677,835 8,462,086 3,672,221 Debt service:
Principal retirement 9,903,628 342,996 430,447 570,876 Interest and fiscal charges 9,509,119 277,403 269,039 260,465 Cost of issuance - - - - Total expenditures 120,644,168 87,068,008 84,742,029 89,185,601 Excess/(deficiency) of Revenues Over Expenditures (22,777,768) 10,982,502 (1,355,079) (3,138,635) Other financing sources (uses):
Issuance of debt - - - 12,752 Discount on bonds issued - - - - Sale of capital assets 23,611 6,489 (659,841) - Capital leases - - 427,300 125,074 Partnership contributions - - - (6,537,501) Transfers in 65,681,454 11,511,222 5,227,487 5,911,842 Transfers out (60,581,454) (17,185,934) (977,487) (9,762,267) Total other financing sources (uses) 5,123,611 (5,668,223) 4,017,459 (10,250,100) Net Change in Fund Balances (17,654,157) $ 5,314,279 $ 2,662,380 $ (13,388,735) $ Debt service as a percentage of noncapital expenditures 18.82% 0.81% 0.93% 0.95% Notes:
(1) Amounts have been restated to reflect lighting and landscaping expenditures as part of highways, streets, and parks instead of culture and recreation.
(2) Beginning in fiscal year 2009-2010, all costs relating to the construction inspection function are reported under community development instead of highways, streets, and parks. Also, the storm water management function is under general government instead of highways, streets, and parks.
(3) Beginning in fiscal year 2016-2017, all sales tax related revenue is recorded under the intergovernmental revenue category instead of taxes and special assessments revenue category.
Source: City of San Marcos, Finance Department
Fiscal Year
-141-
Fiscal Year
2016 2017 2018 2019 2020 2021
43,388,689$ 28,386,492 $ 30,734,448 $ 37,396,482 $ 35,074,453 $ 35,336,432 $ 5,190,125 5,184,798 5,567,081 4,829,046 4,982,848 5,758,317 8,388,620 22,446,951 24,240,158 22,558,222 30,208,872 50,774,854 15,644,089 15,756,224 16,391,482 16,112,574 15,608,463 17,466,496 5,680,240 6,770,876 10,269,151 5,217,642 7,775,654 7,826,185 492,091 632,114 592,516 498,336 389,034 257,569 9,887,780 9,814,976 8,625,937 11,496,722 19,363,307 8,782,267 3,003,475 1,656,344 2,170,216 1,873,724 1,556,989 1,163,325 91,675,109 90,648,775 98,590,989 99,982,748 114,959,620 127,365,445 15,769,553 20,232,292 17,619,187 21,862,137 24,474,209 22,215,742 9,218,570 9,224,684 6,419,708 4,795,779 9,921,546 13,323,540 33,512,449 36,449,543 37,334,894 37,782,655 39,103,687 42,204,560 16,739,415 19,258,048 18,924,332 18,575,680 18,682,862 18,038,640 3,611,161 3,814,190 3,930,935 3,759,978 3,416,437 3,248,975 - - - - - - - - - - - - 11,115,705 10,255,091 6,235,184 19,258,698 16,762,011 31,070,090 677,198 970,360 1,474,503 860,105 907,466 1,111,330 259,734 286,705 246,947 155,238 219,983 225,850 - - 108,311 - 90,903,785 100,490,913 92,294,001 107,050,270 113,488,201 131,438,727 771,324 (9,842,138) 6,296,988 (7,067,522) 1,471,419 (4,073,282) 1,036,580 - - - - - - - - - - - - - - 4,521,104 1,138,302 2,427,572 432,248 2,018,392 - - 1,509,757 585,414 - - - - - - 6,441,564 5,470,561 9,820,141 11,859,523 14,722,108 17,515,183 (1,941,564) (2,153,423) (4,820,141) (7,509,523) (11,222,108) (14,115,183) 5,968,828 5,335,530 5,000,000 8,871,104 6,148,059 6,412,986 6,740,152$ (4,506,608) $ 11,296,988 $ 1,803,582 $ 7,619,478 $ 2,339,704 $
0.99% 1.42% 2.12% 1.07% 1.18% 1.28%
City of San Marcos
Assessed Value and Estimated Actual Value of Taxable Property (1) Last Ten Fiscal Years
-142-
Fiscal
Year Secured Unsecured Less: Exemptions
Taxable
Assessed Value
Direct Tax
Rate (2)
2012 8,908,023,695$ 342,676,146 $ (441,238,868) $ 8,809,460,973 $ 0.0883 % 2013 8,949,312,131 351,245,593 (482,223,209) 8,818,334,515 0.0883 2014 9,339,081,684 337,792,578 (503,189,791) 9,173,684,471 0.0883 2015 10,183,486,233 337,507,007 (548,057,005) 9,972,936,235 0.0883 2016 10,811,344,739 329,112,145 (559,042,771) 10,581,414,113 0.0883 2017 11,407,192,886 337,739,348 (570,825,511) 11,174,106,723 0.0883 2018 12,146,122,751 348,333,349 (595,248,906) 11,899,207,194 0.0883 2019 12,991,489,372 370,104,590 (619,191,733) 12,742,402,229 0.0883 2020 13,815,539,662 379,261,628 (579,152,010) 13,615,649,280 0.0883 2021 14,506,330,312 384,186,012 (654,981,947) 14,235,534,377 0.0883 Notes:
(1) In 1978 the voters of the State of California passed Proposition 13 which limited property taxes to a total maximum rate of 1% based upon the assessed value of the property being taxed. Each year, the assessed value of property may be increased by an "inflation factor" (limited to a maximum increase of 2%). With few exceptions, property is only re-assessed at the time that it is sold to a new owner. At that point, the new assessed value is re-assessed at the purchase price of the property sold. The assessed valuation data shown above represents the only data currently available with respect to the actual market value of taxable property and is subject to the limitations described above. (2) Tax Rate Area 13-066.
Source: San Diego County Assessor's Office
City of San Marcos
Direct and Overlapping Property Tax Rates (1)
Last Ten Fiscal Years
(rate per $100 of assessed value)
-143-
Direct Rate Overlapping Rates
Fiscal
Year
City of San
Marcos
San
Marcos
Unified
School
District
San
Marcos
Fire
Protection
District
San
Diego
County Others
Voter
Approved
Debt
Total Tax
Rate
(2)
2012 0.0883 % 0.3805 %0 . 0 6 3 2 % 0.2481 % 0.2200 % 0.0994 % 1.0994 % 2013 0.0883 0.3805 0.0632 0.2481 0.2200 0.0994 1.0994 2014 0.0883 0.3805 0.0632 0.2481 0.2200 0.0978 1.0978 2015 0.0883 0.3805 0.0632 0.2481 0.2200 0.1138 1.1138 2016 0.0883 0.3805 0.0632 0.2481 0.2200 0.1180 1.1180 2017 0.0883 0.3805 0.0632 0.2481 0.2200 0.1175 1.1175 2018 0.0883 0.3805 0.0632 0.2481 0.2200 0.0910 1.0911 2019 0.0883 0.3805 0.0632 0.2481 0.2200 0.0908 1.0908 2020 0.0883 0.3805 0.0632 0.2481 0.2200 0.0970 1.0970 2021 0.0883 0.3805 0.0632 0.2481 0.2200 0.0804 1.0804 Notes:
(1) Tax rates are for Tax Rate Area 13-066.
(2) In 1978, California voters passed Proposition 13 which sets the property tax rate at a 1% fixed amount. This 1% is shared by all taxing agencies in which the subject property resides. In addition to the 1% fixed amount, property owners are charged taxes as a percentage of assessed property values for the payment of various voter-approved bonds.
Source: San Diego County Auditor and Controller Office Allocation of 1% Ad Valorem Property Taxes
City of San Marcos
Property Tax Levies and Collections
Last Ten Fiscal Years (1)
-144-
Taxes Levied Collections in
Fiscal for the Fiscal Percentage Subsequent
Year Year Amount of Levy Years Amount Percentage
2012 5,646,455$ 5,479,552 $ 97.04 % 107,645 $ 5,587,197 $ 98.95 % 2013 5,900,446 5,735,557 97.21 78,614 5,814,171 98.54 2014 6,281,371 6,071,920 96.67 72,088 6,144,008 97.81 2015 6,502,541 6,342,713 97.54 76,923 6,419,636 98.73 2016 6,875,051 6,704,823 97.52 68,390 6,773,213 98.52 2017 7,280,193 7,082,528 97.28 79,211 7,161,739 98.37 2018 7,584,842 7,402,491 97.60 72,873 7,475,364 98.56 2019 8,110,254 7,879,445 97.15 68,736 7,948,181 98.00 2020 8,257,634 7,990,099 96.76 91,555 7,990,099 96.76 2021 8,671,538 8,522,190 98.28 N/A 8,522,190 98.28 Notes:
(1) The amounts presented include the City and Fire District property taxes.
Source: San Diego County Auditor and Controller Office Collected within the Fiscal
Year of the Levy Total Collections to Date
City of San Marcos
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
-145-
Fiscal
Year
Revenue
Bonds
Notes
Payable Capital Leases
Loans Payable
(3)
Total Primary
Government
Percentage
of Personal
Income
Per
Capita
2012 5,376,667 $ 743,880 $ - $ - $ 6,120,547$ 0.15 % 72$ 2013 5,144,000 635,884 602,188 - 6,382,072 0.15 75 2014 4,901,333 521,949 413,919 530,676 6,367,877 0.14 73 2015 4,653,666 401,747 411,883 469,865 5,937,161 0.12 66 2016 4,390,999 274,934 633,034 1,432,155 6,731,122 0.13 73 2017 4,118,332 141,146 2,250,022 1,271,983 7,781,483 0.14 83 2018 (2) - - 1,731,711 4,643,642 6,375,353 0.11 66 2019 - - 1,334,885 4,158,664 5,493,549 0.09 57 2020 - - 2,413,785 3,682,055 6,095,840 0.09 63 2021 - - 2,376,171 3,193,753 5,569,924 (4) Note:
(1) General bonded debt is debt payable with governmental fund resources. Details regarding the City's outstanding debt can be found in the notes to basic financial statements. (2) Revenue Bonds refunded as of November 29, 2017
(3) Beginning 2018 includes Safety Center Private Placement Financing (4) Personal income data for 2021 is unavailable.
Source: City of San Marcos, Finance Department
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City of San Marcos
Ratios of General Bonded Debt Outstanding
Last Ten Fiscal Years
-146-
Fiscal
Year
General
Obligation
Bonds
Revenue
Bonds (1) Total
Percent of
Assessed
Value (2) Per Capita
Col N
2012 - $ 5,376,667$ 5,376,667 $ 0.061 63 $ 0.061% 2013 - 5,144,000 5,144,000 0.058 59 0.058% 2014 - 4,901,333 4,901,333 0.053 54 0.053% 2015 - 4,653,666 4,653,666 0.047 51 0.047% 2016 - 4,390,999 4,390,999 0.041 47 0.041% 2017 - 4,118,332 4,118,332 0.037 44 0.037% 2018 (3) - - - 0.000 - 0.000% 2019 - - - 0.000 - 0.000% 2020 - - - 0.000 - 0.000% 2021 - - - 0.000 - 0.000% Notes:
(1) The revenue bonds are secured by lease payments to be made by the City and the County of San Diego.
(2) Assessed value has been used because actual value of taxable property is not readily available in the State of California.
(3) Revenue Bonds refunded as of November 29, 2017
Source: City of San Marcos, Finance Department
City of San Marcos
Legal Debt Margin Information
Last Ten Fiscal Years
-147-
Fiscal Year
2012 2013 2014 2015
Total assessed valuation 9,250,699,841 $ 9,300,557,724 $ 9,676,874,262 $ 10,520,993,240 $ Conversion percentage 25% 25% 25% 25%
Adjusted assessed valuation 2,312,674,960 2,325,139,431 2,419,218,566 2,630,248,310 Debt limit percentage 15% 15% 15% 15%
Debt limit 346,901,244 348,770,915 362,882,785 394,537,247 Total net debt applicable to limit:
General obligation bonds - - - - Legal debt margin 346,901,244 $ 348,770,915 $ 362,882,785 $ 394,537,247 $ Total debt applicable to the limit
as a percentage of debt limit 0.000% 0.000% 0.000% 0.000% Note:
The Government Code of the State of California provides for a legal debt limit of 15% of gross assessed valuation.
However, this provision was enacted when assessed valuation was based upon 25% of market value. Effective with the 1981-82 fiscal year, each parcel is now assessed at 100% of market value (as of the most recent change in ownership for that parcel). The computations shown above reflect a conversion of assessed valuation data for each fiscal year from the current full valuation perspective to the 25% level that was in effect at the time that the legal debt margin was enacted by the State of California for local governments located within the State.
Source: City of San Marcos, Finance Department
County of San Diego Tax Assessor's Office
-148-
Fiscal Year
2016 2017 2018 2019 2020 2021
11,140,456,884$ 11,744,932,234 $ 12,494,456,100 $ 13,361,593,962 $ 14,194,801,290 $ 14,890,516,324 $ 25% 25% 25% 25% 25% 25%
2,785,114,221 2,936,233,059 3,123,614,025 3,340,398,491 3,548,700,323 3,722,629,081 15% 15% 15% 15% 15% 15%
417,767,133 440,434,959 468,542,104 501,059,774 532,305,048 558,394,362.15 - - - - - - 417,767,133$ 440,434,959 $ 468,542,104 $ 501,059,774 $ 532,305,048 $ 558,394,362 $
0.000% 0.000% 0.000% 0.000% 0.000% 0.000%
City of San Marcos
Pledged-Revenue Coverage
Last Ten Fiscal Years
-149-
Revenue Bonds (1)
Debt Service (2)
Fiscal Year Revenue Principal Interest Coverage
2012 470,690$ 225,000 $ 245,690 $ 1.00 2013 471,490 235,000 236,490 1.00 2014 471,890 245,000 226,890 1.00 2015 466,990 250,000 216,990 1.00 2016 471,524 265,000 206,524 1.00 2017 470,353 275,000 195,353 1.00 2018 (3) - - - 1.00 2019 - - - 1.00 2020 - - - 1.00 2021 - - - 1.00 Notes:
(1) Revenue bonds are secured by lease payments to be made by the City and the County of San Diego. (2) Debt service shown is annual debt service.
(3) Revenue Bonds refunded as of November 29, 2017
Source: City of San Marcos, Finance Department
City of San Marcos
Direct and Overlapping Debt
As of June 30, 2021
-150-
2020-21 Assessed Valuation: (1) $14,331,123,577
Estimated
Percentage Outstanding Debt
Share of
Overlapping
DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT: Applicable (2) June 30, 2021 (3) Debt Metropolitan Water District 0.437% 26,830,000$ 117,247 $ Palomar Community College District 10.614% 650,751,375 69,070,751 San Marcos Unified School District 62.968% 279,770,706 176,166,018 San Marcos Unified School District School Facilities Improvement District No. 1 0.000% - - San Marcos Unified School District Community Facilities District No. 3 100.000% 515,000 515,000 San Marcos Unified School District Community Facilities District No. 4 64.607% 14,220,000 9,187,115 San Marcos Unified School District Community Facilities District No. 7 100.000% 6,840,000 6,840,000 Other School Districts Various 1,127,780,326 384,803 Palomar Pomerado Hospital 11.823% 415,526,602 49,127,710 City of San Marcos 100.000% - -
City of San Marcos Community Facilities District No. 88-1 100.000% 7,800,115 7,800,115 City of San Marcos Community Facilities District No. 91-01 0.000% - - City of San Marcos Community Facilities District No. 99-01 100.000% 49,675,000 49,675,000 City of San Marcos Community Facilities District No. 2002-1 100.000% 10,575,000 10,575,000 TOTAL DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT 379,458,759 DIRECT AND OVERLAPPING GENERAL FUND DEBT:
San Diego County General Fund Obligations 2.447% 211,585,000 $ 5,177,485 San Diego County Pension Obligation Bonds 2.447% 400,125,000 9,791,059 San Diego County Superintendent of Schools Obligations 2.447% 8,585,000 210,075 Palomar Community College District General Fund Obligations 10.614% 1,560,000 165,578 San Marcos Unified School District General Fund Obligations 62.968% 72,899,158 45,903,142 Other School District Certificates of Participation Various 78,445,000 90,631 City of San Marcos General Fund Obligations 100.000% 5,569,924 (4) 5,569,924 TOTAL DIRECT AND OVERLAPPING GENERAL FUND DEBT 66,907,894 OVERLAPPING TAX INCREMENT DEBT (Successor Agency): 100.000% 254,970,000$ 254,970,000 TOTAL DIRECT DEBT 5,569,924
TOTAL OVERLAPPING DEBT 695,766,729
COMBINED TOTAL DEBT (3) (4) 701,336,653$
Direct Debt 0.00%
Total Direct and Overlapping Tax and Assessment Debt 2.65% Combined Direct Debt ($5,569,924) 0.04%
Combined Total Debt 4.89%
Ratios to Redevelopment Incremental Valuation ($9,746,876,976):
Total Overlapping Tax Increment Debt 2.62%
Notes:
(1) Total gross assessed valuation less all other exemptions except homeowners. (2) The percentage of overlapping debt applicable to the City is estimated using taxable assessed property value. Applicable percentages were estimated by determining the portion of the overlapping district's assessed value that is within the boundaries of the City divided by the district's total taxable assessed value. (3) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and non-bonded capital lease obligations. (4) Includes non-bonded capital lease obligations of the City.
Source: California Municipal Statistics, Inc.
City of San Marcos, Finance Department
City of San Marcos
Demographic and Economic Statistics
Last Ten Fiscal Years
-151-
Fiscal
Year
Square
Miles Population
Population
Percentage
Change
Personal Income
(1)
Per Capita
Personal
Income (1)
Unemployment
Rate
2012 33.07 85,159 0.68 4,171,939,410 $ 48,990 $ 8.90 % 2013 33.07 87,165 2.36 4,265,680,770 48,938 7.50 2014 33.07 89,946 3.19 4,626,732,294 51,439 5.00 2015 33.07 92,076 2.37 4,968,697,188 53,963 4.00 2016 33.07 93,242 1.27 5,268,732,452 56,506 3.66 2017 33.07 94,258 (2) 1.09 5,502,782,040 58,380 3.41 2018 33.07 95,768 1.60 5,855,925,896 61,147 3.30 2019 33.07 96,335 0.59 6,139,333,215 63,729 2.80 2020 33.07 97,209 0.91 6,441,651,594 66,266 5.68 2021 33.07 96,302 -0.93 - -
Notes:
(1) Data presented is for San Diego/Chula Vista/Carlsbad economic area. FY2019 data was updated. (2) Fiscal Year 2017 Population was revised by the State Department of Finance. (3) Personal income and per capita personal income data for 2021 is unavailable.
Sources: Population information provided by the State Department of Finance.
Personal income data provided by the U.S. Department of Commerce.
Unemployment data provided by the California Employment Development Department.
City of San Marcos
Principal Employers
Current Year and Nine Years Ago
-152-
Employer (1)
Number of
Employees Rank
Percent of
Total
Employment
(2)
Number of
Employees Rank
Percent of
Total
Employment
(2)
San Marcos Unified School District 2,464 1 5.33%
California State University San Marcos 1,800 2 3.89%
Palomar Community College 1,769 3 3.82%
Hunter Industries, Inc. 815 4 1.76% 729 1 2.53%
United Parcel Service, Inc. 551 5 1.19% 434 2 1.51%
Southern California Permanente Medical Group 449 6 0.97% 301 4 1.04% Costco Wholesale 390 7 0.84% 267 8 0.93%
North County Health Services 250 8 0.54%
Lusardi Construction Co. 250 9 0.54% 300 5 1.04%
Wal-Mart Stores, Inc. 216 10 0.47% 359 3 1.25%
Hughes Circuits Inc. 210 11 0.45% 194 15 0.67%
Hollandia Dairy, Inc. 206 12 0.45% 180 18 0.62%
The Home Depot 197 13 0.43% 138 22 0.48%
San Marcos Operating Co LP 157 14 0.34%
Diamond Environmental Services 151 15 0.33% 150 20 0.52% Total 9,875 21.35% 3,052 10.59%
Notes:
(1) Prior to 2016, Schools and the City were not included. (2) Total Employment as used above represents the total employment of all employers located within the City limits.
Sources: City of San Marcos, Business License Directory City of San Marcos, Economic Development Department
California Employment Development Department.
2021 2012
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City of San Marcos
Full-time and Part-time Employees by Function
Last Ten Fiscal Years
-153-
Fiscal Year
Function/Program 2012 2013 2014 2015 2016 2017 2018 2019 2020 (2) 2021 General government 55 58 57 61 56 52 43 67 40 48
C o m m u n i t y d e v e l o p m e n t 3 83 94 23 42 62 93 34 02 5 3 4 Public safety
(1) 92 95 97 90 105 108 104 129 108 121
Highways, streets and parks 77 76 76 77 84 88 92 97 82 65 Culture and recreation 126 128 120 149 181 177 158 200 73 121 Total 388 396 392 411 452 454 430 533 328 389
Note:
(1) Includes Fire services only. Police services are provided to the City by the County. (2) Due to the COVID-19 pandemic, employment numbers are significantly lower than previous years.
Source: City of San Marcos, Finance Department
City of San Marcos
Operating Indicators by Function (1)
Last Ten Years
-154-
Fiscal Year
Function/Program 2012 2013 2014 2015 2016
General Government:
Number of business licenses issued 5,455 5,519 5,623 5,593 5,762 Number of requests for public information 270 253 238 276 355 Number of new hires including part-time 86 85 90 123 182 Number of invoices processed 11,810 12,354 13,464 13,342 12,813 Public Safety:
Police:
Contracts with the San Diego
County Sheriff's Department for
full service law enforcement
Fire:
Number of emergency calls 7,382 7,287 7,675 8,889 10,719 Number of fire inspections 2,367 3,214 2,953 2,894 2,419 Highways and Streets:
Number of street lights added in current year 24 6 19 - 5 Number of traffic signals added in current year 1 - 1 1 3 Miles of streets swept 14,976 15,165 15,175 12,090 12,090 Miles of centerline streets added - 5 - - - Storm drain structures cleaned and repaired (2) 580 568 597 596 602 Culture and Recreation (3):
Number of facility rentals 761 768 799 802 862 Number of swim program participants 40,820 46,211 52,577 57,009 40,711 Number of adult sports participants 38,897 41,660 46,313 47,094 50,814 Number of youth sports participants 13,714 20,946 22,946 23,014 26,415 Number of senior nutrition program meals served 14,031 13,455 12,775 13,039 10,813 Community Development:
Number of building permits issued 866 1,248 1,700 1,877 2,390 Approximate number of building inspections conducted 28,466 15,247 15,713 10,922 12,150 Number of new business licenses issued 1,273 1,316 1,342 1,462 1,519 Note:
(1) Water and sewage treatment services are provided primarily by the Vallecitos Water District. (2) The significant increase in FY2018 was due to equipment acquisition which increased cleaning capabilities. (3) Due to the COVID-19 pandemic, many Parks and Recreation programs were shut down for much of 2020 through June 2021, hence the decrease in number of participants and facility rentals.
Source: Various City of San Marcos Departments
-155-
Fiscal Year
2017 2018 2019 2020 2021
5,916 5,898 6,086 5,808 5,450
346 353 379 492 693
150 144 165 83 117
12,287 12,123 12,123 12,290 10,624
11,258 11,458 11,275 10,838 11,603
2,431 3,168 2,748 1,745 1,482
30 15 6 6 -
1 - 4 3 - 12,090 12,157 12,157 12,354 12,354
-- - - -
719 1,109 282 487 448
925 931 1,052 641 107
38,105 33,955 21,338 11,634 3,705
55,809 59,361 64,025 59,056 1,470
27,013 32,092 33,603 21,256 4,112
10,997 12,024 11,450 11,642 12,846
2,198 2,326 2,337 2,200 2,409
10,641 16,829 11,999 9,127 10,669
1,407 1,346 1,385 1,166 1,138
City of San Marcos
Capital Asset Statistics by Function/Program
Last Ten Fiscal Years
-156-
Function/Program 2012 2013 2014 2015 2016
Public Safety:
Police (1)
Fire
Number of fire stations 4 4 4 4 4 Number of emergency vehicles 32 36 38 41 44 Highways and Streets:
Miles of streets (2) 194 199 197 197 197 Number of street lights 2,691 2,702 2,708 2,708 2,713 Culture and Recreation:
Parks (3) 34 34 35 35 35 Acres of park and trail land (3) 380 380 384 384 384 Pools 2 2 2 2 2 Notes:
(1) The City contracts with the San Diego County Sheriff's Department for full service law enforcement. (2) An audit of the City's street inventory was conducted during FY2012 and it was determined that private streets were being included in the total miles of streets. Private street have now been removed from the total.
(3) An audit of the City's parks and trails was conducted in FY2018 and it was determined that acres of park land reported in the prior years included trail land. Also, the number of parks has been revised to included parks owned by the City and developers, which the City maintains and has the right to use. The numbers are revised starting in FY2017.
Sources: Various City Departments.
Fiscal Year
-157-
2017 2018 2019 2020 2021
44444
47 47 50 50 50
197 198 204 204 204
2,743 2,758 2,760 2,383 2,383
36 36 36 37 39
333 333 333 287 256
22222
Fiscal Year
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