Annual Comprehensive
Financial Report
Fiscal Year Ended June 30, 2022
City of San Marcos, California
1 Civic Center Drive | San Marcos, CA 92069-2918 | (760)744-1050 | www.san-marcos.net
ANNUAL COMPREHENSIVE
FINANCIAL REPORT City Manager: Jack Griffin
Finance Director: Lisa FowlerFiscal Year Ended June 30, 2022 Prepared by the Finance Department
MISSION STATEMENT
The City of San Marcos strives to improve the
quality of life for those who live, work or visit
San Marcos by providing a safe, family-oriented
atmosphere that is rich and diverse in cultural
and natural resources while promoting economic
and educational opportunities.
City of San Marcos,
California
ANNUAL COMPREHENSIVE
FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2022
Prepared by the San Marcos Finance Department
City of San Marcos
Annual Comprehensive Financial Report
For the Year Ended June 30, 2022
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 ................................ 90 Schedule of Plan Contributions – Agent Plan ................................................................ 92 Schedule of City’s Proportionate Share of the Plan’s Net Pension Liability and Related Ratios as of the Measurement Date .................................................... 93 Schedule of Plan Contributions – Cost-Sharing Plan ..................................................... 94 Schedule of Changes in Net OPEB Liability and Related Ratios as of the Measurement Date .................................................................................... 95
City of San Marcos
Annual Comprehensive Financial Report
For the Year Ended June 30, 2022
TABLE OF CONTENTS, (Continued)
FINANCIAL SECTION, (Continued):
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget to Actual:
General Fund ..................................................................................................... 96 San Marcos Affordable Housing Fund ................................................................ 97 Notes to Required Supplementary Information .............................................................. 98 Supplementary Schedules:
Non-Major Governmental Funds:
Combining Balance Sheet ...................................................................................... 102 Combining Statement of Revenues, Expenditures and Changes in Fund Balances ................................................................................................. 103 Non-Major Special Revenue Funds:
Combining Balance Sheet ...................................................................................... 104 Combining Statement of Revenues, Expenditures and Changes in Fund Balances ................................................................................................. 106 Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual:
Gas Tax Special Revenue Fund ...................................................................... 108 Traffic Safety Special Revenue Fund ............................................................... 109 Community Facilities District 98-02 Special Revenue Fund ............................. 110 Street Lighting District Special Revenue Fund ................................................. 111 Senior Nutrition Grant Special Revenue Fund ................................................. 112 Community Development Block Grant Special Revenue Fund ........................ 113 Center Drive Maintenance Special Revenue Fund .......................................... 114 Art in Public Places Special Revenue Fund ..................................................... 115 Public, Education and Government Special Revenue Fund ............................. 116 Congestion Management CFD Special Revenue Fund .................................... 117 CalHOME Grant Special Revenue Fund .......................................................... 118 CASp Fee Special Revenue Fund ................................................................... 119 Gas Tax RMRA Special Revenue Fund ........................................................... 120 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 ......................... 121 Non-Major Capital Projects Funds:
Combining Balance Sheet ...................................................................................... 122 Combining Statement of Revenues, Expenditures and Changes in Fund Balances ................................................................................................. 124 Fiduciary Funds:
Combining Statement of Fiduciary Net Position ..................................................... 126 Combining Statement of Changes in Fiduciary Net Position .................................. 127
City of San Marcos
Annual Comprehensive Financial Report
For the Year Ended June 30, 2022
TABLE OF CONTENTS, (Continued)
STATISTICAL SECTION (UNAUDITED):
Net Position by Component ............................................................................................... 129 Changes in Net Position ..................................................................................................... 131 Fund Balances of Governmental Funds ............................................................................. 135 Changes in Fund Balances of Governmental Funds ......................................................... 137 Assessed Value and Estimated Actual Value of Taxable Property .................................... 139 Direct and Overlapping Property Tax Rates ...................................................................... 140 Property Tax Levies and Collections .................................................................................. 141 Ratios of Outstanding Debt by Type .................................................................................. 142 Ratios of General Bonded Debt Outstanding ..................................................................... 143 Legal Debt Margin Information ........................................................................................... 144 Pledged-Revenue Coverage .............................................................................................. 146 Direct and Overlapping Debt .............................................................................................. 14 7 Demographic and Economic Statistics ............................................................................... 148 Principal Employers ......................................................................................................... .. 149 Full-Time and Part-Time City Employees by Function ....................................................... 150 Operating Indicators by Function ....................................................................................... 151 Capital Asset Statistics by Function/Program .................................................................... 153
-i-
Transmittal Letter………………………………………………………….
December 27, 2022
Members of the Council and Citizens of San Marcos:
It is our pleasure to present the City of San Marcos (City) fiscal year 2021-22 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 publ ic accountants.
The goal of the independent audit was to provide reasonable assurance that the financial statements of the City 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 bas is for rendering an un modified (clean) opinion. The independent auditor ’s 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 information 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 rather 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.
SAN MARCOS
DISCOVER LIFE'S POSSIBILITIES
www.san-marcos .net
1 Civic Center Drive I San Marcos, CA 92069 I (760) 744-1050
ii
-ii-
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. Toda y, often nicknamed still as “Valley of Discovery”, the City offers rugged beautiful rolling hills, bustling 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, Ora nge, Imperial, San Bernardino, Riverside and Los Angeles counties. It is situated along the State Highway 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 extends covers approximately thirty-three square miles. The City continues to be the smallest yet fastest growing population along the 78 Corridor and is one of the highest in median household income along the 78 corridor. The most current population and income for the City can be found in the San Marcos Data Dashboard on the City’s Economic Development website.
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.
The City Council is comprised of five council members for a term of four years , 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 as the Traffic Commission and Planning Commission, to address specific issues. These advisory commission members are appointed by the City Council.
' II
City of San Marcos I 1 Civic Center Drive I San Marcos, CA 92069 I (760) 744-1050 I www.san-marcos.net
iii
-iii-
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 the 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 sustainability 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. The City is home to a labor force of 41,000 and over 4,200 businesses. While staffing and supply chain issues , caused by the pandemic , continue to affect local business, the unemployment rate has reportedly stabilized at 3.1 %, in September 2022 slightly lower than the 3.8 reported for the entire State for the same month.
Real Estate Market:
Real estate values in the City have seen an average annual appreciation of 26.2% from 2000 to 2021 with median home prices dipping slightly to a reported at $885,000 in October of 2022. This is slightly lower than the median listing home price in the County, which was reported to be $899,700 in November 2022.
However, 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. The City continues to support businesses through the COVID -19 global pandemic as they navigate the repercussions of the pandemic’s residual effects.
Property tax revenue receipts are expected to increase upwards of 16% over prior year. Sales tax revenue is estimated to increase , by approximately 6%, in fiscal year 2022 -23 compared to prior year receipts. There is an optimistic expectation that future sales tax & property tax revenue will not decrease further and may produce a minimal increase and stabilize to pre -pandemic trends.
' II
City of San Marcos I 1 Civic Center Drive I San Marcos, CA 92069 I (760) 744-1050 I www.san-marcos.net
iv
-iv-
Future 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 FY 20 2-23 CIP budget appropriation was $14.1 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.
Long Range Financial Forecast:
A five-year general fund financial forecast is developed as part of the budgeting process, which serves to guide the long -range fiscal planning, and budget develop ment process. This forecast details the City’s major revenue and expenditure items to provide long-term trend analysis and projections .
Current economic indicators and revenue forecasts reflect a slightly positive outlook over the next five years compared to prior year.
This positive outlook , along with American Rescue Plan Act funds, resulted in balanced budget for the FY 2022-23 Operating budget of approximately $89.4 million, an increase of $9.1 million from the prior year adopted budget. Still, the City is expected to experience increases in general fund expenditure , in future 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 adjust from the pandemic health and economic impacts , 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 revenue and charges for services is forecasted to alleviate the challenges we faced in prior years. ' II
City of San Marcos I 1 Civic Center Drive I San Marcos, CA 92069 I (760) 744-1050 I www.san-marcos.net
v
-v-
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 future and continuous rehabilitation and replacement of City infrastructure .
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 Economic 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 (33.3 percent), and Economic Contingency/Pension Stabilization Reserve (33.3percent).
The City continues to focus on the City Council strategic goals such as, comprehensive planning and action in land use and transportation, i nfrastructure 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 , retail, and public service 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. In Fiscal Year 2021-22. The City of was selected as a California Parks and Recreation Society District 12 Parks Make Life Better Spotlight Award.
Acknowledgments:
Management wishes to express appreciation 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.
' II
City of San Marcos I 1 Civic Center Drive I San Marcos, CA 92069 I (760) 744-1050 I www.san-marcos.net -vi-
Respectfully submitted,
~
Finance Director
City of San Marcos I 1 Civic Center Drive I San Marcos, CA 92069 I (760) 744-1050 I www.san-marcos.net
-vii-
City of San Marcos
Organizational Chart
June 30, 2022
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
Assistant City Manager
-viii-
City of San Marcos
List of Principal Officials
June 30, 2022
City Council
Mayor Rebecca Jones
Deputy Mayor Sharon Jenkins
Council Member Ed Musgrove
Council Member Maria Nunez
Council Member Randy Walton
Administration
City Manager/Treasurer Jack Griffin
Assistant City Manager Michelle Bender
City Attorney Helen Holmes Peak
City Clerk Phillip Scollick
Department/Division Heads
Development Services Director Isaac Etchamendy
Economic Development Director Tess Sangster
Finance Director Lisa Fowler
Fire Chief Daniel Barron
Human Resources/Risk Director Janelle Laughlin
Parks and Recreation Director Buck Martin
Public Works Director Darren Chamow
Sheriff Station Captain Jason Vickery
-ix-
This page intentionally left blank.
735 E. Carneg ie Dr. Suite I 00
San Bernardino , CA 92408
909 889 087 1 T
909 889 536 1 F
r amscpa .net
PARTNERS
Teny P Shea. CPA
Scott W Manno. CPA. CGMA
Leena Shanbhag. CPA. MST. CGMA
Br·adferd A. Welebir. CPA. MBA. CGMA
Jenny W Liu. CPA. MST
Brenda L Odle. CPA, MST 1Parrner Emer·irusl
MANAGERS / STAFF
Gar·denya Duran, CPA. CGMA
Br·ianna Schulu. CPA. CGMA
Seong-Hyea Lee. CPA. MBA
Evelyn Mor·entin-Barcena. CPA
Veronrca Hernandez. CPA
Laura Arvizu. CPA
X rnlu Zoe Zhang, CPA MSA
John Maldonado, CPA. MSA
Julia Rodr·iguez Fuentes. CPA. MSA
Demi Hrte. CPA
Jeffrey McKennan, CPA
MEMBERS
Amer-ican I nstrtute of
Cernfied Public Accountants
PCPS The A/CPA A.I/ranee
{o, CPA Ftrms
Governmental Audit
Quality Cente,
Employee Benefit Plan
Aud,r Qual,ry Cente,
Californra Socrety of
Cen:ifred Publrc Accountants
dil5b Proud Member of
qgp AlliottGlobalAlliance™
mm IIIJ
ROGERS , ANDERSON , MALODY & SCOTT , LLP
CERTIFIED PUBLIC ACCOUNTANTS. SINCE 1948
STABILITY . ACCURACY . TRUST.
-1-
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 financial 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 Marc os (the City), as of and for the year ended June 30, 2022, and the related not es 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 financia l statements presen t fairly, in all material respects, the respective fi nancial position of the governmental activities, the business-type activiti es, the discretely presented component unit, each major fund, and the aggregate remaining fund information of the City, as of June 30, 2022, and the respective changes in financial position and, where applicable, cash flows th ereof for the year then ended in accordance with accounting principl es generally accepted in the United States of America.
Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statem ents 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.
Emphasis of Matter
As discussed in Note 1 to the fina ncial statements, the City adopted provisions of Governmental Accounting Standards Board Statement No. 87, Leases. Our opinions are not modified with respect to this matter.
-2-
Responsibilities of Management for the Financial Statements
The City’s management is responsible for the preparati on and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United Stat es of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is required to evaluate whethe r there are conditions or events, considered in the aggregate, that raise substant ial doubt about the City’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statem ents as a whole are free from material misstatement, whether due to fraud or erro r, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assura nce but is not absolute assu rance and therefore is not a guarantee that an audit conducted in ac cordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatem ent resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intent ional omissions, misrepresentations, or the override of internal control. Misstatements are cons idered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment m ade 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 ma terial misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures resp onsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, no such opinion is expressed. Evaluate the appropriateness of accounting policie s 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 conditi ons or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings , and certain internal control–related matters that we identified during the audit.
Required Supplementary Information
Accounting principles generally accepted in the Unit ed States of America requi re that the required supplementary information, as listed in the table of contents be present ed to supplement the basic financial statements.
Such information is the responsibility of managem ent and, although not a part of the basic financial statements, is required by the Gove rnmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited proc edures to the required supplementary information in accordance with auditing standards g enerally accepted in the United States of America, which consisted of inquiries of management about the me thods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial st atements. 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.
-3-
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 supplementary 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 the responsibility of management and was derived from and relates directly to the underlying accounting and other re cords 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 procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prep are the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the supplementary information is fairly stated, in all material respects, in relation to the basic financial statements as a whole.
Other Information 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 financial st atements do not cover the other information, and we do not express an opinion or any form of assurance thereo n. In connection with our audit of the financial statements, our responsibility is to read the other info rmation and consider whether a material inconsistency exists between the other information and the financial stat ements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated December 27, 2022 on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulatio ns, 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 27, 2022
This page intentionally left blank.
City of San Marcos
Management’s Discussion and Analysis
For the Year Ended June 30, 2022
-4-
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, 2022. 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 $1,044,629,322 (net position). Of this amount, $138,734,381 represents unrestricted net position, which represents the majority of investments in real estate and joint venture.
• The City’s total net position increased $26,523,994 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 $230,995,759, an increase of $15,801,663 in comparison with the prior year. Approximately 9.6% of this amount or $22,182,202 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 $43,222,196, or approximately 46.30% 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, 2022
-5-
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, 2022
-6-
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, 2022
-7-
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 30-89 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 90-98 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 102-103 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 $1,044,629,322, at the close of the most recent fiscal year.
City of San Marcos
Management’s Discussion and Analysis
For the Year Ended June 30, 2022
-8-
City of San Marcos' Net Position
2022 2021 2022 2021 2022 2021
Current and other assets 460,478,670$ 433,617,956 $ 95,076,788 $ 97,507,901 $ 555,555,458 $ 531,125,857 $ Capital assets, net 601,410,159 596,561,459 - - 601,410,159 596,561,459 Total assets 1,061,888,829 1,030,179,415 95,076,788 97,507,901 1,156,965,617 1,127,687,316 Deferred outflows
of resources 15,461,949 17,241,101 - - 15,461,949 17,241,101 Non-current liabilities 64,564,223 90,151,448 - - 64,564,223 90,151,448 Other liabilities 38,754,123 33,747,859 2,394,777 360,088 41,148,900 34,107,947 Total Liabilities 103,318,346 123,899,307 2,394,777 360,088 105,713,123 124,259,395 Deferred inflows
of resources 22,085,121 2,563,694 - - 22,085,121 2,563,694 Net position
Net investment in
capital assets 596,923,771 591,038,322 - - 596,923,771 591,038,322 Restricted 308,971,170 293,984,458 - - 308,971,170 293,984,458 Unrestricted 46,052,370 35,934,735 92,682,011 97,147,813 138,734,381 133,082,548 Total net position 951,947,311$ 920,957,515 $ 92,682,011 $ 97,147,813 $ 1,044,629,322$ 1,018,105,328 $ Total
Business-Type
Activities
Governmental
Activities
By far, the largest portion of the City’s net position (57.1%) 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 (29.6%) represents resources that are subject to external restrictions on how they may be used. The remaining balance of $138,734,381 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 $26,523,994 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, 2022
-9-
Governmental Activities. During the current fiscal year, net position for governmental activities increased $30,989,796 from the prior fiscal year for an ending balance of $951,947,311. 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
2022 2021 2022 2021 2022 2021
Revenues
Program revenues:
Charges for services 33,105,706 $ 28,018,162 $ 4,713,033 $ 4,617,947 $ 37,818,739 $ 32,636,109 $ Operating contributions and
grants 23,654,054 24,626,457 - - 23,654,054 24,626,457 Capital contributions and grants 23,424,439 22,305,574 - - 23,424,439 22,305,574 General revenues:
Property taxes 26,695,907 24,980,971 - - 26,695,907 24,980,971 Transient occupancy taxes 1,416,495 871,393 - - 1,416,495 871,393 Business license tax 241,640 230,340 - - 241,640 230,340 Motor vehicle license 111,588 72,985 - - 111,588 72,985 Franchise fees 4,644,009 4,220,898 - - 4,644,009 4,220,898 Rental income 5,626,286 7,290,221 - - 5,626,286 7,290,221 Sales taxes shared state
revenue, unrestricted 21,966,581 17,308,573 - - 21,966,581 17,308,573 In lieu sales tax, unrestricted - - - - - - Investment income, restricted 137,263 109,624 - - 137,263 109,624 Investment income, unrestricted 9,924,829 1,921,787 (3,287,385) 2,483 6,637,444 1,924,270 Gain (loss) on disposal of
capital assets 191,367 (74,079) - - 191,367 (74,079) Miscellaneous 549,913 1,026,771 - - 549,913 1,026,771 Total Revenues 151,690,077 132,909,677 1,425,648 4,620,430 153,115,725 137,530,107 Expenses
General government 32,589,843 24,133,604 - - 32,589,843 24,133,604 Community development 12,423,814 13,174,383 - - 12,423,814 13,174,383 Public safety 42,170,941 45,837,054 - - 42,170,941 45,837,054 Highways, streets and parks 32,747,776 33,373,256 - - 32,747,776 33,373,256 Culture and recreation 4,119,671 3,557,335 - - 4,119,671 3,557,335 Interest on long-term debt 148,236 259,529 - - 148,236 259,529 Creekside Marketplace - - 2,391,450 974,272 2,391,450 974,272 Total Expenses 124,200,281 120,335,161 2,391,450 974,272 126,591,731 121,309,433 Increase in Net Position
Before Transfers 27,489,796 12,574,516 (965,802) 3,646,158 26,523,994 16,220,674 Transfers 3,500,000 3,400,000 (3,500,000) (3,400,000) - - Change in Net Position 30,989,796 15,974,516 (4,465,802) 246,158 26,523,994 16,220,674 Net Position, Beginning 920,957,515 904,982,999 97,147,813 96,901,655 1,018,105,328 1,001,884,654 Net Position, Ending 951,947,311 $ 920,957,515 $ 92,682,011 $ 97,147,813 $ 1,044,629,322$ 1,018,105,328 $ Total
Governmental
Activities
Business-Type
Activities
City of San Marcos
Management’s Discussion and Analysis
For the Year Ended June 30, 2022
-10-
Increase
(Decrease) Percent
Percent From Increase
Revenue Source 2022 of Total 2021 (Decrease)
Charges for services 33,105,706 $ 21.3% 5,087,544 $ 15.4% Operating contributions and grants 23,654,054 15.2% (972,403) -4.1% Capital contributions and grants 23,424,439 15.1% 1,118,865 4.8% Property taxes 26,695,907 17.2% 1,714,936 6.4% Franchise fees 4,644,009 3.0% 423,111 9.1% Sales taxes shared state revenue 21,966,581 14.2% 4,658,008 21.2% Rental income 5,626,286 3.6% (1,663,935) -29.6% Other general revenue and transfers 16,073,095 10.4% 8,514,274 53.0% Total revenue 155,190,077 $ 100.0% 18,880,400 $ 12.2% Charges for
Services, 21.3%
Operating
Contributions and
Grants, 15.2%
Capital
Contributions and
Grants, 15.1%
Property Taxes,
17.2%
Franchise Fees,
3.0%
Sales taxes shared
state revenue,
14.2%
Rental income,
3.6%
Other General
Revenue and
Transfers, 10.4%
GOVERNMENTAL ACTIVITIES
Revenue by Source
Fiscal Year 2021-22
City of San Marcos
Management’s Discussion and Analysis
For the Year Ended June 30, 2022
-11-
Increase
(Decrease) Percent
Percent From Increase
Function 2022 of Total 2021 (Decrease)
General government 32,589,843 $ 26.2% 8,456,239 $ 25.9% Community development 12,423,814 10.0% (750,569) -6.0% Public safety 42,170,941 34.0% (3,666,113) -8.7% Highways, streets and parks 32,747,776 26.4% (625,480) -1.9% Culture and recreation 4,119,671 3.3% 562,336 13.7% Interest on long-term debt 148,236 0.1% (111,293) -75.1% Total expenses 124,200,281 $ 100.0% 3,865,120 $ 3.1% General
Government, 26.2%
Community
Development,
10.0%
Public Safety,
34.0%
Highways, Streets
and Parks, 26.4%
Culture and
Recreation, 3.3%
Interest on Long-
Term Debt, 0.1%
GOVERNMENTAL ACTIVITIES
Expenses by Function
Fiscal Year 2021-22
Business-type Activities. For the City’s business-type activities, the results for the current fiscal year were positive. Overall net position decreased to an ending balance of $92,682,011.
The Creekside Marketplace Enterprise Fund accounts for the activity of a City-owned shopping center. The total decrease in net position for business-type activities was $4,465,802 or -4.6% from the prior fiscal year.
City of San Marcos
Management’s Discussion and Analysis
For the Year Ended June 30, 2022
-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.
On June 30, 2022, the City’s governmental funds reported combined fund balances of $230,995,759, an increase of $15,801,663 in comparison to the prior year. Approximately 9.6% or $22,182,202 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 ($74,313,510), 2) restricted for particular purposes ($122,635,417), or 3) assigned for particular purposes ($11,864,630).
Rental income decreased $1,663,935 or 29.6% primarily due to decrease in number of tenants.
Capital outlay expenditures decreased by $6,441,057 or -20.7% mostly due to decrease in construction of the San Marcos Creek Specific Plan project which is nearing completion.
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 $31,357,566, while the total fund balance increased by $3,197,668 or 2.7% to $119,934,432. 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 33.59% of total General Fund expenditures, while total fund balance represents approximately 128.46% 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 $41,640,214. To assist with the construction of affordable housing projects, $5,239,074 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, 2022
-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 ($9,019,515).
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 continued to be negatively impacted at the creation of the FY 2021-22 budget, leading to the City Council adopting the FY 2021-22 budget at a deficit. To address the deficit, the City Council authorized the appropriation of a portion of the first tranche of the American Rescue Plan Act (ARPA) funds to balance the budget for FY 2021-22. At the time of approval of the mid- year budget adjustments, improvements to anticipated revenue sources led to a projected budget surplus, to be appropriated per the City’s Fiscal Management Policy.
The General Fund revenues exceeded amended budgeted revenues by approximately $2.3 million in FY 2021-22. The excess revenue was due in part to higher transient occupancy tax, higher Fire Department-related revenues, and Development Services fees for building and engineering related purposes.
The General Fund expenditure budget came in slightly higher than the amended budget by approximately $1.8 million. The higher than anticipated expenditure amounts was in large part due to the services provided by the Fire Department and resulted in higher revenues as noted above.
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, 2022, amounts to $601,410,159 (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 $4,848,700 or approximately 0.81% due to an increase in construction in progress offset by capital asset dispositions and depreciations.
City of San Marcos
Management’s Discussion and Analysis
For the Year Ended June 30, 2022
-14-
City of San Marcos’ Capital Assets
(Net of accumulated depreciation)
2022 2021 2022 2021 2022 2021
Land and Improvements 304,667,384$ 304,872,384 $ - $ - $ 304,667,384$ 304,872,384 $ Buildings 37,424,670 38,889,801 - - 37,424,670 38,889,801 Furniture and Equipment 6,611,179 7,300,733 - - 6,611,179 7,300,733 Infrastructure 166,235,878 177,696,225 - - 166,235,878 177,696,225 Construction in progress 86,471,048 67,802,316 - - 86,471,048 67,802,316 Total 601,410,159$ 596,561,459 $ - $ - $ 601,410,159$ 596,561,459 $ 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 $64,564,223. Of this amount, $2,250,000 is debt backed by the full faith and credit of the government. The remainder of the City’s long-term obligations comprises pension-related debt, OPEB debt, note and loans payables, worker’s compensation claims, compensated absences, and leases.
City of San Marcos’ Non-Current Outstanding Liabilities
2022 2021 Net Change
Compensated absences 5,175,026$ 4,921,505 $ 253,521 $ Claims payable 1,193,859 1,457,862 (264,003) Leases payable 1,759,679 2,376,171 (616,492) Loans payable - Safety Center 2,250,000 2,585,000 (335,000) Loans payable - CEC 517,647 608,753 (91,106) Net pension liability 43,266,363 68,415,153 (25,148,790) Total OPEB liability 10,401,649 9,787,004 614,645 Total 64,564,223$ 90,151,448 $ (25,587,225) $ Governmental
Activities
City of San Marcos
Management’s Discussion and Analysis
For the Year Ended June 30, 2022
-15-
The City’s total liabilities decreased by $25,587,225, or -28.4% during the current fiscal year.
The decrease was due to change in net pension liability and principal reduction as result of on- going debt service payments. Additional information on the City’s long-term liabilities can be found in Note 8, on pages 54-58 of this report and also at Notes 11 and 12.
ECONOMIC FACTORS AND NEXT YEAR'S BUDGET
The economy of the City is discussed in the accompanying Transmittal Letter.
At the creation and preparation of the FY 2022-23 budget, the inflation rate rose to 8.3% by March 2022 as unemployment rates began to normalize and the Consumer Price Index continued to rise to almost 8%. The economic impacts created by the global pandemic, which significantly impacted prior years’ budgets, appeared to still be a concern with the development of the FY 2022-23 General Fund operating budget as the nation continued to experience economic turbulence. The approved budget for FY 2022-23 General Fund operating budget projects an 11% increase in spending projections over the prior year approved budget.
However, revenue is projected to increase 15% over the prior year approved budget.
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. The approved FY 2022-23 operating budget was adopted with a projected balanced budget, with the support of the Federal American Rescue Plan Act “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 2022- 23 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, 2022
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) 173,491,120 $ - $ 173,491,120$ - $ Cash and investments with fiscal agents (note 2) 801,413 - 801,413 - Pension trust cash and investments (note 2) 2,398,726 - 2,398,726 - Investments in real estate (note 2) 64,760,000 92,310,000 157,070,000 - Investment in joint venture (note 14) 6,534,134 - 6,534,134 - Receivables:
Taxes and special assessments 4,129,155 - 4,129,155 - Accounts 3,879,913 546,448 4,426,361 - Interest 201,801 - 201,801 - Notes (note 3) 187,326,539 - 187,326,539 - Other (note 4) 964,241 641,646 1,605,887 - Due from other governments 6,168,075 - 6,168,075 - Advances to Successor Agency (note 17) 4,754,663 - 4,754,663 - Deposits 2,578,782 3,324,242 5,903,024 1,368,800 Prepaids - 2,879 2,879 - Internal balances 1,748,427 (1,748,427) - - Land held for resale 741,681 - 741,681 - Capital assets, not depreciated (note 7) 391,138,432 - 391,138,432 - Capital assets, net of depreciation (note 7) 210,271,727 - 210,271,727 - Total Assets 1,061,888,829 95,076,788 1,156,965,617 1,368,800
DEFERRED OUTFLOWS OF RESOURCES
Pension related 13,363,085 - 13,363,085 - Loss on defeasance of debt 40,938 - 40,938 - OPEB related 2,057,926 - 2,057,926 - Total Deferred Outflows of Resources 15,461,949 - 15,461,949 -
LIABILITIES
Accounts payable 13,416,556 2,165,465 15,582,021 13,365 Accrued liabilities 2,435,593 - 2,435,593 - Due to other governments 9,300 - 9,300 139,409 Unearned revenue (note 6) 12,997,321 164,579 13,161,900 - Deposits payable 9,895,353 64,733 9,960,086 - Noncurrent liabilities:
Due within one year (note 8) 4,802,891 - 4,802,891 - Due in more than one year (note 8) 6,093,320 - 6,093,320 - Net pension liability, due in more than one year 43,266,363 - 43,266,363 - Total OPEB liability, due in more than one year 10,401,649 - 10,401,649 - Total Liabilities 103,318,346 2,394,777 105,713,123 152,774
DEFERRED INFLOWS OF RESOURCES
Pension related 20,616,889 - 20,616,889 - OPEB related 1,468,232 - 1,468,232 - Total Deferred Inflows of Resources 22,085,121 - 22,085,121 - NET POSITION (NOTE 10)
Net investment in capital assets 596,923,771 - 596,923,771 - Restricted for:
Affordable housing 227,818,434 - 227,818,434 - Lighting and landscape 17,688,560 - 17,688,560 - Public facilities 43,506,990 - 43,506,990 - Other purposes 19,957,186 - 19,957,186 1,216,026 Unrestricted 46,052,370 92,682,011 138,734,381 - Total Net Position 951,947,311 $ 92,682,011 $ 1,044,629,322$ 1,216,026 $
City of San Marcos
Statement of Activities
For the Year Ended June 30, 2022
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 32,589,843 $ 1,384,202 $ 328,560 $ - $ Community development 12,423,814 5,416,289 10,973,032 1,840,443 Public safety 42,170,941 14,862,440 374,745 19,103 Highways, streets, and parks 32,747,776 8,976,054 11,767,342 21,564,893 Culture and recreation 4,119,671 2,466,721 210,375 - Interest on long-term debt 148,236 - - - Total governmental activities 124,200,281 33,105,706 23,654,054 23,424,439 Business-type activities:
Creekside Marketplace 2,391,450 4,713,033 - - Total Primary Government 126,591,731 $ 37,818,739 $ 23,654,054 $ 23,424,439 $ Component Unit:
Permanent Fund Community
Foundation 76,844 $ - $ - $ - $ Total Component Unit 76,844 $ - $ - $ - $ Program Revenues
-18-
Permanent
Fund
Governmental Business-Type Community
Functions/Programs Activities Activities Total Foundation Governmental activities:
General government (30,877,081) $ - $ (30,877,081)$ - $ Community development 5,805,950 - 5,805,950 - Public safety (26,914,653) - (26,914,653) - Highways, streets, and parks 9,560,513 - 9,560,513 - Culture and recreation (1,442,575) - (1,442,575) - Interest on long-term debt (148,236) - (148,236) - Total governmental activities (44,016,082) - (44,016,082) - Business-type activities:
Creekside Marketplace - 2,321,583 2,321,583 - Total Primary Government (44,016,082) 2,321,583 (41,694,499) - Component Unit:
Permanent Fund Community
Foundation - - - (76,844) Total Component Unit - - - (76,844) General revenues:
Taxes:
Property taxes 26,695,907 - 26,695,907 - Transient occupancy taxes 1,416,495 - 1,416,495 - Business license tax 241,640 - 241,640 - Motor vehicle license tax 111,588 - 111,588 - Franchise fees 4,644,009 - 4,644,009 - Rental income 5,626,286 - 5,626,286 - Sales taxes shared state revenue, unrestricted 21,966,581 - 21,966,581 - Investment income, restricted 137,263 - 137,263 (182,446) Investment income, unrestricted 9,924,829 (3,287,385) 6,637,444 - Gain on disposal and sale of capital assets 191,367 - 191,367 - Miscellaneous income 549,913 - 549,913 - Transfers (note 5) 3,500,000 (3,500,000) - - Total general revenues and transfers 75,005,878 (6,787,385) 68,218,493 (182,446) Change in Net Position 30,989,796 (4,465,802) 26,523,994 (259,290) Net Position, Beginning 920,957,515 97,147,813 1,018,105,328 1,475,316 Net Position, Ending 951,947,311 $ 92,682,011 $ 1,044,629,322$ 1,216,026 $ Net (Expense) Revenue
and Changes in Net Position
City of San Marcos
Balance Sheet
Governmental Funds
June 30, 2022
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) 61,138,923 $ 34,477,476 $ - $ 77,874,721$ 173,491,120 $ Cash and investments with fiscal agents (note 2) - - - 801,413 801,413 Pension trust cash and investments (note 2) 2,398,726 - - - 2,398,726 Investments in real estate (note 2) 64,760,000 - - - 64,760,000 Investment in joint venture (note 14) 6,534,134 - - - 6,534,134 Receivables: -
Taxes and special assessments 4,097,842 - - 31,313 4,129,155 Accounts 3,774,847 19,263 1,140 84,663 3,879,913 Interest 61,745 41,248 6,890 91,918 201,801 Notes, net (note 3) 10,024,869 175,295,789 - 2,005,881 187,326,539 Other, net (note 4) 843,725 - - 120,516 964,241 Due from other governments 765,271 - 4,484,959 917,845 6,168,075 Advances to other funds (note 5) - 1,576,665 - - 1,576,665 Due from other funds (note 5) 5,720,660 570,000 - - 6,290,660 Advances to Successor Agency (note 17) - 4,754,663 - - 4,754,663 Deposits 2,578,782 - - - 2,578,782 Land held for resale 440,594 301,087 - - 741,681 Total Assets 163,140,118 $ 217,036,191 $ 4,492,989 $ 81,928,270 $ 466,597,568 $
RESOURCES AND FUND BALANCES
Liabilities:
Accounts payable 6,695,611 $ 12,728 $ 5,690,396$ 1,017,821 $ 13,416,556 $ Accrued liabilities 2,172,999 26,650 16,082 209,007 2,424,738 Due to other governments - - - 9,300 9,300 Advances from other funds (note 5) 1,576,665 - - - 1,576,665 Due to other funds (note 5) 570,000 - 3,894,523 77,710 4,542,233 Unearned revenue (note 6) 9,945,848 - 3,051,473 - 12,997,321 Deposits payable 9,360,434 34,498 490,032 10,389 9,895,353 Total Liabilities 30,321,557 73,876 13,142,506 1,324,227 44,862,166 Unavailable revenue (note 6) 12,884,129 175,322,101 369,998 2,163,415 190,739,643 Nonspendable:
Land held for resale 440,594 - - - 440,594 Deposits 2,578,782 - - - 2,578,782 Investments in real estate (note 2) 64,760,000 - - - 64,760,000 Investment in joint venture (note 2) 6,534,134 - - - 6,534,134 Restricted:
Affordable housing - 41,640,214 - - 41,640,214 Transportation - - - 12,369,452 12,369,452 Lighting and landscape - - - 17,669,362 17,669,362 Pension trust 2,398,726 - - - 2,398,726 Capital improvements - - - 999,771 999,771 Public facilities - - - 43,370,100 43,370,100 Other purposes - - - 4,187,792 4,187,792 Assigned 11,864,630 - - - 11,864,630 Unassigned 31,357,566 - (9,019,515) (155,849) 22,182,202 Total Fund Balances 119,934,432 41,640,214 (9,019,515) 78,440,628 230,995,759 Total Liabilities, Deferred Inflows of Resources
and Fund Balances 163,140,118 $ 217,036,191 $ 4,492,989 $ 81,928,270 $ 466,597,568 $
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, 2022
The accompanying notes are an integral part of these financial statements. -20-
Fund balances of governmental funds 230,995,759 $
Amounts reported for governmental activities in the Statement of Net Position are different because:
Capital assets, not depreciated 391,138,432 $
Capital assets, being depreciated 485,221,166
Less: accumulated depreciation (274,949,439) 601,410,159 40,938
debt has not been reported in the governmental funds. Therefore, interest payable is not reported as a liability in governmental funds. (10,855) reported in the governmental funds.
Pension related deferred outflows of resources 13,363,085 Pension related deferred inflows of resources (20,616,889) (7,253,804) reported in the governmental funds.
OPEB related deferred outflows of resources 2,057,926
OPEB related deferred inflows of resources (1,468,232) 589,694 are not reported in the funds.
Compensated absences (5,175,026)
Claims payable (1,193,859)
Lease liability (1,759,679)
Loans payable (2,767,647)
Net pension liability (43,266,363)
Total OPEB liability (10,401,649) (64,564,223)
190,739,643
Net position of governmental activities 951,947,311 $
expenditures and, therefore, are reported as unavailable revenue in the funds.
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 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 City of San Marcos
Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds
For the Year Ended June 30, 2022
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 28,354,042$ - $ - $ 9,660,680$ 38,014,722 $ Licenses and permits 6,229,489 - - - 6,229,489 Intergovernmental 22,735,088 - 20,801,137 7,232,403 50,768,628 Charges for services 20,530,129 - - - 20,530,129 Developer fees 16,981 3,533,471 - 9,408,714 12,959,166 Fines and forfeitures 68,465 - - - 68,465 Investment and rental income 15,385,322 966,943 (116,942) (975,382) 15,259,941 Miscellaneous 942,337 432,506 - 242,492 1,617,335 Total Revenues 94,261,853 4,932,920 20,684,195 25,568,907 145,447,875
EXPENDITURES
Current:
General government 30,630,065 418,518 - - 31,048,583 Community development 7,655,634 3,962,033 - 623,161 12,240,828 Public safety 42,816,495 - - - 42,816,495 Highways, streets and parks 7,871,875 - - 9,664,172 17,536,047 Culture and recreation 3,690,542 - - 394,114 4,084,656 Capital outlay - - 24,584,579 44,454 24,629,033 Debt service:
Principal 616,492 - - 426,106 1,042,598 Interest and fiscal charges 81,183 - - 63,156 144,339 Total Expenditures 93,362,286 4,380,551 24,584,579 11,215,163 133,542,579 Excess (Deficiency) of Revenues
Over (Under) Expenditures 899,567 552,369 (3,900,384) 14,353,744 11,905,296
OTHER FINANCING SOURCES (USES)
Proceeds from sale of capital assets 396,367 - - - 396,367 Transfers in (note 5) 4,220,708 142,500 5,984,073 955,502 11,302,783 Transfers out (note 5) (2,318,974) - - (5,483,809) (7,802,783) Total Other Financing Sources (Uses) 2,298,101 142,500 5,984,073 (4,528,307) 3,896,367 Net Change in Fund Balances 3,197,668 694,869 2,083,689 9,825,437 15,801,663 Fund Balances (Deficit), Beginning 116,736,764 40,945,345 (11,103,204) 68,615,191 215,194,096 Fund Balances (Deficit), Ending 119,934,432$ 41,640,214 $ (9,019,515) $ 78,440,628 $ 230,995,759 $
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, 2022
The accompanying notes are an integral part of these financial statements. -22-
Net change in fund balances - total governmental funds 15,801,663 $ Amounts reported for governmental activities in the Statement of Activities are different because:
Capital asset expenditures capitalized 23,665,172 $
Depreciation expense, net of deletions to capital assets (18,816,472) 4,848,700 change during the year.
Long-term loans receivable 6,050,835
Principal payments on long-term debt 1,042,598
Changes in pension related items 3,739,303
Changes in OPEB related items (499,888) 4,282,013 Change in compensated absences (253,521)
Change in claims payable 264,003
Change in accrued interest 1,952
Amortization of deferred loss (5,849) 6,585 Change in net position of governmental activities 30,989,796 $ 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 i tems 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.
Governmental funds report capital outlays as expenditures. However, in 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.
City of San Marcos
Statement of Net Position
Proprietary Funds
June 30, 2022
The accompanying notes are an integral part of these financial statements. -23-
Creekside
Marketplace
Current Assets:
Investments in real estate (note 2) 92,310,000 $
Receivables:
Accounts 546,448
Prepaids 2,879
Deposits 3,324,242
Total Current Assets 96,183,569
Noncurrent Assets:
Other receivable (note 4) 641,646
Total Noncurrent Assets 641,646
Total Assets 96,825,215
Current Liabilities:
Accounts payable 2,165,465
Due to other funds 1,748,427
Deposits payable 64,733
Unearned revenue 164,579
Total Liabilities 4,143,204
Unrestricted 92,682,011
Total Net Position 92,682,011 $
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, 2022
The accompanying notes are an integral part of these financial statements. -24-
Creekside
Marketplace
OPERATING REVENUES
Rental income 4,072,585 $
Common area maintenance charges 640,448
Total Operating Revenues 4,713,033
OPERATING EXPENSES
Property management 660,663
Janitorial 190,612
Repairs and maintenance 1,540,175
Total Operating Expenses 2,391,450
Operating Income 2,321,583
NON-OPERATING REVENUES
Investment income (3,287,385)
Total Non-Operating Revenues (3,287,385)
Income Before Transfers (965,802)
TRANSFERS
Transfers out (note 5) (3,500,000)
Total Transfers (3,500,000)
Change in Net Position (4,465,802)
Net Position, Beginning 97,147,813
Net Position, Ending 92,682,011 $
Enterprise Fund
City of San Marcos
Statement of Cash Flows
Proprietary Funds
For the Year Ended June 30, 2022
The accompanying notes are an integral part of these financial statements. -25-
Enterprise Fund
Creekside
Marketplace
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers 5,743,673 $
Payments to suppliers for goods and services (2,391,450) Net cash provided by operating activities 3,352,223
CASH FLOWS FROM NONCAPITAL FINANCING
ACTIVITIES
Receipts from settlement agreement 19,493
Transfer to general fund (3,500,000)
Net cash (used for) noncapital financing
activities (3,480,507)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest received 13,779
Net increase (decrease) in cash and cash equivalents (114,505) Cash and cash equivalents, beginning 114,505
Cash and cash equivalents, ending - $
RECONCILIATION OF OPERATING INCOME TO NET
CASH PROVIDED BY OPERATING ACTIVITIES:
Operating income 2,321,583 $
Adjustments to reconcile operating income to net
cash provided by operating activities:
(Increase) decrease in operating receivables:
Accounts receivable (131,279)
Deposits receivable (2,621,197)
Increase (decrease) in operating liabilities:
Accounts payable 2,082,793
Due to other funds 1,748,427
Deposits payable (6,496)
Unearned revenue (41,608)
Net cash provided by for operating activities 3,352,223 $ City of San Marcos
Statement of Fiduciary Net Position
Fiduciary Funds
June 30, 2022
The accompanying notes are an integral part of these financial statements. -26-
Private-Purpose Custodial
Trust Fund Funds
Cash and investments (note 2) 5,697,910 $ - $
Receivables:
Special assessments - 10,520
Interest 6,630 39
Direct financing lease 1,487,546 -
Prepaid expenses 257,459 -
Restricted Assets:
Cash and investments with
fiscal agents (note 2) 36,662,937 9,509,434
Total Assets 44,112,482 9,519,993
Loss on defeasance of debt 8,511,258 -
Accounts payable 8,579 165,999
Accrued liabilities 7,105 -
Accrued interest payable 2,246,717 -
Due to other governments 5,755 15,450
Noncurrent Liabilities:
Due within one year 13,210,000 -
Due in more than one year 226,191,104 -
Total Liabilities 241,669,260 181,449
Restricted for:
Other taxing entities and other agencies (189,045,520) $ 9,338,544 $
LIABILITIES
NET POSITION (DEFICIT)
DEFERRED OUTFLOWS OF RESOURCES
ASSETS
City of San Marcos
Statement of Changes in Fiduciary Net Position
Fiduciary Funds
For the Year Ended June 30, 2022
The accompanying notes are an integral part of these financial statements. -27-
Private-Purpose Custodial
Trust Fund Funds
ADDITIONS
Tax 24,872,452 $ 10,680 $
Income from property and investments (29,176) 7,117,743 Other revenue 142,958 -
Total Additions 24,986,234 7,128,423
DEDUCTIONS
General and administrative 6,042,117 -
Interest expense and fees 9,567,965 -
Administrative expense - 241,041
Payments to fiscal agent on behalf
of other agencies - 7,230,850
Total Deductions 15,610,082 7,471,891
Change in Net Position 9,376,152 (343,468)
Net Position (Deficit), Beginning (198,421,672) 9,682,012 Net Position (Deficit), Ending (189,045,520) $ 9,338,544 $
City of San Marcos
Index to Notes to Basic Financial Statements
For the Year Ended June 30, 2022
-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 ........................................................................................................... 39 (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……………………………………………………………… 59 NOTE 10 NET POSITION CLASSIFICATIONS……................................................................................ 60 City of San Marcos
Index to Notes to Basic Financial Statements
For the Year Ended June 30, 2022
-29-
NOTE 11 RETIREMENT PL AN……….……………………… ……............................................................. 61 NOTE 12 OTHER POSTEMPLOYMENT BENEFITS (OPEB)……………………………………………… … 72 NOTE 13 INSURANCE….............................................................................................................. ........... 76 NOTE 14 JOINT VENTURES……........................................................................................................ ... 79 NOTE 15 ASSESSMENT DISTRICT, COMMUNITY FACILITIES DISTRICTS BONDS AND CONDUIT DEBT........................................................................................................ . 81 NOTE 16 COMMITMENTS AND CONTINGENT LIABILITIES................................................................. 82 NOTE 17 SUCCESSOR AGENCY TRUST FOR ASSETS OF FORMER
REDEVELOPMENT AGENCY............................................................................................ 82 NOTE 18 OTHER REQUIRED NOTE DISCLOSURES........................................................................... . 89
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2022
-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, 2022
-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, 2022
-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, 2022
-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, 2022
-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, 2022
-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, 2022
-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, 2022
-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, 2022
-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, 2021
Measurement Period July 1, 2020 to June 30, 2021
(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, 2022
-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, 2020
Measurement Date (MD) June 30, 2021
Measurement Period (MP) July 1, 2020 to June 30, 2021
(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, 2022
-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, 2022, the City implemented the following GASB standard:
GASB Statement No. 87 – The Governmental Accounting Standards Board (GASB) has issued Statement No. 87, Leases. The objective of this Statement is to better meet the information needs of financial statement us ers by improving accounting and financial reporting for leases by governments.
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2022
-41-
2) CASH AND INVESTMENTS
Cash and investments are classified in the accompanying financial statements as follows:
Statement of net position:
Cash and investments $ 173,491,120
Cash and investments with fiscal agents 801,413 Pension trust cash and investments 2,398,726 Investments in real estate 157,070,000
Investment in joint venture 6,534,134
Statement of fiduciary net position:
Private-Purpose Trust Fund
Cash and investments 5,697,910
Cash and investments with fiscal agents 36,662,937 Custodial Funds
Cash and investments with fiscal agents 9,509,434 Total Cash and Investments $ 392,165,674
Cash and investments at June 30, 2022 consisted of the following:
Demand deposits $ 10,314,060
Local Agency Investment Pool (LAIF) 67,009,454 California Asset Management Pool (CAMP) 41,870,352 Federal Agency Securities 18,031,394
U.S. Treasury Obligations 17,271,431
U.S. Corporate 16,979,526
Municipal Obligations 735,165
Asset-Backed Securities 7,537,555
Collateralized Mortgage Obligations 2,466,263 Supranational 597,784
Money Market Mutual Funds 45,748,556
Real Estate 157,070,000
Joint Venture 6,534,134
Total Cash and Investments $ 392,165,674
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2022
-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, 2022
-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 Percentage Investment
Authorized Investment Type Matu rity Allowed in One Issuer U.S. Treasury Obligations None None None
Federal Agency Securities None None None
Bankers’ Acceptances 180 days None None
Commercial Paper 270 days 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 entity Investment Contracts None None None
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.
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2022
-44-
2) CASH AND INVESTMENTS, (continued)
Interest Rate Risk, (continued)
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 18,031,394 $ 1,842,829 $ 11,303,542 $ 4,885,023 $ - $ U.S. Treasury Obligations 15,768,867 - 8,750,879 7,017,988 - U.S. Corporate 16,979,526 - 10,097,372 6,882,154 - Municipal Obligations 735,165 - 735,165 - - Asset-Backed Securities 7,537,555 - 3,517,841 4,019,714 - Collateralized Mortgage Obligations 2,466,263 130,342 699,098 1,636,823 - Supranational 597,784 - - 597,784 - Money Market Mutual Funds 277,337 277,337 - - - LAIF 67,009,454 67,009,454 - - - CAMP 41,870,352 41,870,352 - - - Held by bond trustees:
Money Market Mutual Funds 45,471,219 45,471,219 - - - U.S. Treasury Obligations 1,502,564 1,502,564 - - - Real Estate 157,070,000 - - - 157,070,000 Total 375,317,480 $ 158,104,097 $ 35,103,897 $ 25,039,486 $ 157,070,000 $ Investment Type
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2022
-45-
2) CASH AND INVESTMENTS, (continued)
Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below is the minimum rating required by the California Government Code, the City’s investment policy, or debt agreements and the actual rating as of year-end for each investment type.
Minimum Standard &
Legal Poor's Rating
Total Rating as of Year End
Federal Agency Securities $ 18,031,394 N/A AA+
U.S. Treasury Obligations 15,768,867 N/A N/A U.S. Corporate 16,979,526 N/A N/A
Municipal Obligations 735,165 N/A AA-
Asset-Backed Securities 7,537,555 N/A AAA
Collateralized Mortgage Obligations 2,466,263 N/A A- Supranational 597,784 N/A AAA
Money Market Mutual Funds 277,337 N/A AAA LAIF 67,009,454 N/A Not Rated
CAMP 41,870,352 N/A AAA
Held by bond trustees:
Money Market Mutual Funds 45,471,219 A AAA
U.S. Treasury Obligations 1,502,564 N/A N/A Real Estate 157,070,000 N/A Not Rated
Total $ 375,317,480
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, 2022 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, 2022
-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, 2022, 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. Currently, LAIF does not have an investment rating. LAIF has a minimum $5,000 transaction amount in increments of $1,000 with a maximum of 15 transactions (combination of deposits and withdrawals) per month. LAIF requires a one-day prior notice for deposits and withdrawals of $10 million or more.
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.
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2022
-47-
2) CASH AND INVESTMENTS, (continued)
Investment in California Asset Management Program Pool, (continued)
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.
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, 2022.
Total Level 1 Level 2 Level 3
Federal Agency Securities 18,031,394 $ - $ 18,031,394$ - $ U.S. Treasury Obligations 15,768,867 - 15,768,867 - U.S. Corporate 16,979,526 - 16,979,526 - Municipal Obligations 735,165 - 735,165 - Asset-Backed Securities 7,537,555 - 7,537,555 - Collateralized Mortgage Obligations 2,466,263 - 2,466,263 - Supranational 597,784 - 597,784 - Held by bond trustees:
U.S. Treasury Obligations 1,502,564 - 1,502,564 - Real Estate 157,070,000 - - 157,070,000 Total Investments by Fair Value Level 220,689,118 - $ 63,619,118$ 157,070,000 $ Not subject to the fair value hierarchy:
LAIF 67,009,454
CAMP 41,870,352
Money Market Mutual Funds 277,337
Held by bond trustees:
Money Market Mutual Funds 45,471,219
Total 375,317,480 $
Investments by Fair Value Level
Fair Value Measurement Using
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2022
-48-
3) NOTES RECEIVABLE
At June 30, 2022, notes receivable consisted of the following:
10,024,869$
769,237
168,832,327
1,871,867
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, 2022 includes accrued interest of $897,063.
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 Redevel opment 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, 2022 includes accrued interest of $551,867.
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2022
-49-
3) NOTES RECEIVABLE, (continued)
814,722$
2,552,485
2,005,881
455,151
187,326,539$
The former City of San Marcos Redevelopment Agency provided loans to individuals under a mortgage assistance program. The loans are to be repaid in 30 years and bear an interest of 3%. Upon the 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, deferred revenue has been recorded in the Affordable Housing Special Revenue Fund.
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, 2022 includes accrued interest of $706,860.
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 revenue has been recorded in the Affordable Housing Special Revenue Fund. The balance at June 30, 2022 includes accrued interest of $114,722.
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2022
-50-
4) OTHER RECEIVABLES
At June 30, 2022, other receivables consisted of the following:
$ 120,516
843,725
$ 964,241
Governmental Funds:
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
Proprietary Funds:
$ 641,646
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, 2022:
Amount
San Marcos Affordable Housing General Fund 570,000 $
General Fund Non-Major Governmental Funds 77,710
General Fund Creekside Marketplace Fund 1,748,427
General Fund Capital Improvements 3,894,523
6,290,660$
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, 2022
-51-
5) INTERFUND RECEIVABLES AND TRANSFERS, (continued)
Long term loans between funds (Advances to/Advances from) were as follows at June 30, 2022:
Amount
San Marcos Affordable Housing General Fund 1,576,665$
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$ 1,220,972 $ 955,502 $ 2,318,974 $ Creekside Marketplace
Enterprise Fund 3,500,000 - - - 3,500,000 Non-major Governmental
Funds 720,708 - 4,763,101 - 5,483,809 Total Transfers In: 4,220,708$ 142,500 $ 5,984,073 $ 955,502 $ 11,302,783$ Transfers In
All of the transfers were made as budgeted. The transfer of $3,500,000 was transferred from the Creekside Marketplace Enterprise Fund to the General Fund to fund operations. $1,220,972 from the General Fund to the Capital Improvements Fund was to fund Capital Improvement projects. $955,502 from General Fund to the Non-Major Governmental Funds was for operational activities. The $4,763,101 transfers from the Non-Major Governmental Funds to the Capital Improvements Fund were also to fund the CIP projects. Of the $955,502 transfers from the Non-Major Governmental Funds to the General Fund, $720,708 was transferred to fund lighting and landscaping costs.
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2022
-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 - $ 9,945,848$ 9,945,848 $ Revenue received from developers
prior to earning - 3,051,473 3,051,473 Revenues earned but not available
within 60 days after the close of
the fiscal year 713,219 - 713,219 Fees receivable from property owners
under various agreements 1,862,634 - 1,862,634 Long-term loans to mobile home
owners 1,003,636 - 1,003,636 Long-term loans to individuals under
under a mortgage assistance program 2,242,632 - 2,242,632 Long-term loans to developers for
the acquisition, construction or
rehabilitation of affordable housing 183,045,655 - 183,045,655 Long-term loan to a developer for
the acquisition, development and
construction of a commercial pad 1,871,867 - 1,871,867 Total unavailable/unearned revenue
for governmental funds 190,739,643 $ 12,997,321 $ 203,736,964 $
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2022
-53-
7) CAPITAL ASSETS
Capital asset activity was as follows for the year ended June 30, 2022:
Governmental Activities: Balance Balance
June 30, 2021 Additions Deletions* June 30, 2022
Capital assets, not depreciated:
Land 238,001,321$ - $ (205,000)$ 237,796,321$ Land improvements 66,871,063 - - 66,871,063 Construction in progress 67,802,316 23,634,314 (4,965,582) 86,471,048 Total capital assets, not
depreciated 372,674,700 23,634,314 (5,170,582) 391,138,432 Capital assets, being depreciated:
Buildings 73,256,572 - - 73,256,572 Furniture and equipment 23,888,394 1,001,680 (1,164,224) 23,725,850 Infrastructure 388,238,744 - - 388,238,744 Total capital assets, being depreciated 485,383,710 1,001,680 (1,164,224) 485,221,166 Less accumulated depreciation for:
Buildings (34,366,771) (1,465,131) - (35,831,902) Furniture and equipment (16,587,661) (1,660,172) 1,133,162 (17,114,671) Infrastructure (210,542,519) (11,460,347) - (222,002,866) Total accumulated depreciation (261,496,951) (14,585,650) 1,133,162 (274,949,439) Total capital assets, being
depreciated, net 223,886,759 (13,583,970) (31,062) 210,271,727 Total governmental activities $ 596,561,459 $ 10,050,344 $ (5,201,644) $ 601,410,159 *Includes disposal of construction in progress in the amount of $3,994,760 for projects deemed not viable.
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2022
-54-
7) CAPITAL ASSETS, (continued)
Depreciation expense was charged to functions/programs of the primary government as follows:
Governmental Activities:
General government $ 844,095
Public safety 1,671,750
Highways, streets and parks 11,927,372
Culture and recreation 142,433
Total depreciation expense – governmental activities $ 14,585,650
Assets acquired through leases are as follows:
Equipment $ 3,411,238
Less: Accumulated depreciation (1,215,917)
Total $ 2,195,321
8) LONG-TERM LIABILITIES
The following is a summary of changes in long-term liabilities for Governmental Activities for the year ended June 30, 2022:
Balance Balance Due Within
June 30, 2021 Additions Deletions June 30, 2022 One Year Governmental Activities:
Long-term debt
Direct borrowing:
Loans payable $ 608,753 $ - (91,106) $ 517,647 $ 90,202 $ Safety center private placement
financing 2,585,000 - (335,000) 2,250,000 340,000 Subtotal long-term debt 3,193,753 - (426,106) 2,767,647 430,202 Other long-term liabilities
Compensated absences 4,921,505 3,170,103 (2,916,582) 5,175,026 3,205,321 Claims payable 1,457,862 332,606 (596,609) 1,193,859 600,000 Leases payable 2,376,171 - (616,492) 1,759,679 567,368 Subtotal other long-term 8,755,538 3,502,709 (4,129,683) 8,128,564 4,372,689 liabilities
Total long-term liabilities 11,949,291$ 3,502,709 $ (4,555,789) $ 10,896,211 $ 4,802,891 $
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2022
-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
517,647$
517,647$
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 $48,484 from the Community Facilities District 98-02 and the Street Light District Special Revenue Funds are due each December 22 and June 22 through year 2027. In the event annual cost savings fail to equal or exceed the amount due under the loan agreement, the agreement may be renegotiated to assure that the repayment amount does not exceed the actual energy savings or avoided costs resulting from the project.
Total loans payable
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2022
-56-
8) LONG-TERM LIABILITIES, (continued)
Loans Payable - Direct Borrowing, (continued)
The annual requirements to amortize the loans payable are as follows:
Year Ending
June 30, Principal Interest Total
2023 92,202$ 4,766 $ 96,968 $
2024 92,749 4,219 96,968
2025 93,874 3,094 96,968
2026 94,815 2,153 96,968
2027 95,765 1,203 96,968
2028 48,242 242 48,484
Total 517,647$ 15,677 $ 533,324 $
Safety Center Private Placement Financing – Direct Borrowing
$ 2,250,000
In November 2017, the San Marcos Public Financing Authority entered into a private placement financing agreement in the amount of $3,535,000 to refund the San Marcos Public Facilities Authority 2006 Lease Revenue Refunding Bonds for the constuction of a safety center.
The interest and principal are due semi-annually on May 1 and November 1 commencing May 1, 2018 at interest rate of 2.37%.
Payments due are funded by the revenues generated from the use of the safety center from various entities. The reserve requirement was fully funded at the end of the fiscal year.
Debt service requirements to maturity are as follows:
2023 340,000$ 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 370,000 20,263 390,263
2028-2029 485,000 13,982 498,982
Total 2,250,000$ 198,723 $ 2,448,723 $
Principal Interest Total
Year Ending
June 30,
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2022
-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 $5,175,026 as of June 30, 2022.
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, 2022 was $1,193,859.
Leases Payable
Type I Fire Engine and Tractor Down Ladder Truck Lease
On October 20, 2016, the City entered into an 84-month lease as Lessee for the use of a 2017 Pierce Type-I Fire Engine and a Pierce 100’ Tractor-Drawn Ladder Truck. An initial lease liability was recorded in the amount of $1,904,493. As of June 30, 2022, the value of the lease liability was $436,183. The lessee is required to make monthly fixed payments of $74,276 until October 20, 2023. The lease has an interest rate of 2.47%. The equipment useful life was 84 months as of the contract commencement. The value of the asset as of June 30, 2022 was $1,904,493 with an accumulated depreciation of $851,629.
Type I Fire Engine – Pierce Velocity FR PUC Lease
On November 22, 2019, the City entered into an 84-month lease as Lessee for the use of a Pierce Velocity Firetruck Type-I . An initial lease liability was recorded in the amount of $1,509,757. As of June 30, 2022, the value of the lease liability was $964,941. The lessee is required to make monthly fixed payments of $61,536 until August 22, 2026. The lease has an interest rate of 4.90%. The value of the asset as of June 30, 2022 was $1,509,757 with an accumulated depreciation of $172,505.
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2022
-58-
8) LONG-TERM LIABILITIES, (continued)
Leases Payable, (continued)
Type III Fire Engine Lease
On October 29, 2020, the City entered into an 84-month lease as Lessee for the use of a Type- III Fire Engine. An initial lease liability was recorded in the amount of $467,519. As of June 30, 2022, the value of the lease liability was $358,555. The lessee is required to make monthly fixed payments of $18,336 until October 20, 2023. The lease has an interest rate of 2.63%. The value of the asset as of June 30, 2022 was $467,519 with an accumulated depreciation of $0.
The City signed lease and began making payments as of January 2021, however per inquiry with City personnel, the Fire Engine was not placed in service until the end of June 2022. As such, no depreciation was expensed or accumulated for FY 2022.
Future lease payments under the leases are as follows:
Year Ending
June 30, Principal Interest Total
2023 567,368$ 50,223 $ 617,591 $
2024 435,188 32,851 468,039
2025 297,965 21,521 319,486
2026 308,280 11,206 319,486
2027 114,565 1,979 116,544
2028 36,313 359 36,672
Total 1,759,679$ 118,139 $ 1,877,818 $
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2022
-59-
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, 2022 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 2,578,782 - - - 2,578,782 Investments in real estate 64,760,000 - - - 64,760,000 Investment in joint venture 6,534,134 - - - 6,534,134 Subtotal 74,313,510 - - - 74,313,510 Restricted for:
Affordable housing - 41,640,214 - - 41,640,214 Transportation - - - 12,369,452 12,369,452 Lighting and landscape - - - 17,669,362 17,669,362 Pension trust 2,398,726 - - - 2,398,726 Capital improvements - - - 999,771 999,771 Public facilities - - - 43,370,100 43,370,100 Other purposes - - - 4,187,792 4,187,792 Subtotal 2,398,726 41,640,214 - 78,596,477 122,635,417 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) 31,357,566 - (9,019,515) (155,849) 22,182,202 Total 119,934,432 $ 41,640,214 $ (9,019,515) $ 78,440,628 $ 230,995,759 $
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2022
-60-
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, 2022 are presented below:
Permanent
Fund
Governmental Business-Type Community
Activities Activities Total Foundation
Net Investment in Capital Assets:
Capital assets, net of accumulated
depreciation 601,410,159 $ - $ 601,410,159$ - $ Loss on defeasance of debt 40,938 - 40,938 - Less capital related debt balances:
Private placement financing (2,250,000) - (2,250,000) - Leases payable (1,759,679) - (1,759,679) - Loans payable (517,647) - (517,647) - Total Net Investment in Capital Assets 596,923,771 - 596,923,771 - Restricted for:
Permanent fund - not expendable - - - 1,000,000 Permanent fund - expendable - - - 216,026 Affordable housing 227,818,434 - 227,818,434 - Transportation 12,370,897 - 12,370,897 - Lighting and landscape 17,688,560 - 17,688,560 - Pension trust 2,398,726 - 2,398,726 - Capital improvements 999,771 - 999,771 - Public facilities 43,506,990 - 43,506,990 - Other purposes 4,187,792 - 4,187,792 - Total Restricted 308,971,170 - 308,971,170 1,216,026 Unrestricted 46,052,370 92,682,011 138,734,381 - Total 951,947,311 $ 92,682,011 $ 1,044,629,322$ 1,216,026 $
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2022
-61-
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, 2022
-62-
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, 2022, 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% 7.25%
Required employer contribution rates 11.310% 11.310% 11.310% 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% 13.75% Required employer contribution rates 25.590% 22.470% 13.980% Miscellaneous Plan
Safety Plan
Employees Covered
At June 30, 2020 (valuation date), the following employees were covered by the benefit terms:
Miscellaneous Plan
Inactive employees or beneficiaries
currently receiving benefits 216
Inactive employees entitled to but
not yet receiving benefits 314
Active employees 179
Total 709
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2022
-63-
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, 2022 were $5,497,462.
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, 2022 were $3,121,569. The actual employer payments of $2,878,444 made to CalPERS by the City during the measurement period ended June 30, 2021 differed from the City’s proportionate share of the employer’s contributions of $4,266,760 by $1,388,316, 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, 2021, using an annual actuarial valuation as of June 30, 2020 rolled forward to June 30, 2021 using standard update procedures. A summary of principal assumptions and methods used to determine the net pension liability is as follows.
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2022
-64-
11) RETIREMENT PLAN, (continued)
B) Net Pension Liability, (continued)
Actuarial Methods and Assumptions Used to Determine Total Pension Liability
All other actuarial assumptions used in the June 30, 2020 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.
Valuation Date June 30, 2020
Measurement Date June 30, 2021
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' s pecific 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, please refer to the CalPERS Experience Study and Review of Actuarial Assumptions report from December 2017 that can be found on the CalPERS website.
Long-term Expected Rate of Return
The long-term expected rate of return on pension plan investments was determined using a building-block method in which expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class.
In determining the long-term expected rate of return, CalPERS took into account both short- term and long-term market return expectations as well as the expected pension fund cash flows. Using historical returns of all of 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.
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2022
-65-
11) RETIREMENT PLAN, (continued)
B) Net Pension Liability, (continued)
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
There were no change of assumptions for measurement date June 30, 2021.
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.
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2022
-66-
11) RETIREMENT PLAN, (continued)
B) Net Pension Liability, (continued)
Subsequent Events
On July 12, 2021, CalPERS reported a preliminary 21.3% net return on investments for fiscal year 2020-21. Based on the thresholds specified in CalPERS Funding Risk Mitigation policy, the excess return of 14.3% prescribes a reduction in investment volatility that corresponds to a reduction in the discount rate used for funding purposes of 0.20%, from
7.00% to 6.80%. Since CalPERS was in the final stages of the four-year Asset Liability Management (ALM) cycle, the board elected to defer any changes to the asset allocation until the ALM process concluded, and the board could make its final decision on the asset allocation in November 2021.
On November 17, 2021, the board adopted a new strategic asset allocation. The new asset allocation along with the new capital market assumptions, economic assumptions and administrative expense assumption support a discount rate of 6.90% (net of investment expense but without a reduction for administrative expense) for financial reporting purposes. This includes a reduction in the price inflation assumption from 2.50% to 2.30% as recommended in the November 2021 CalPERS Experience Study and Review of Actuarial Assumptions. This study also recommended modifications to retirement rates, termination rates, mortality rates and rates of salary increases that were adopted by the board. These new assumptions will be reflec ted in the GASB 68 accounting valuation reports for the June 30, 2022, measurement date.
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, 2022
-67-
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: 6/30/2020 (VD) 152,524,564$ 105,882,460 $ 46,642,104 $ Changes Recognized for the
Measurement Period:
• Service Cost 2,546,641 - 2,546,641 • Interest on the Total
Pension Liability 10,782,695 - 10,782,695 • Differences between
Expected and Actual
Experience 1,095,442 - 1,095,442 • Contributions from
Employers - 4,969,430 (4,969,430) • Contributions from
Employees - 946,753 (946,753) • Net Investment Income - 24,035,409 (24,035,409) • Benefit Payments,
including Refunds of
Employee Contributions (8,172,791) (8,172,791) - • Administrative Expense - (105,770) 105,770 Net Changes during 2020-21 6,251,987 21,673,031 (15,421,044) Balance at: 6/30/2021 (MD) 158,776,551$ 127,555,491 $ 31,221,060 $ Increase (Decrease)
Valuation Date (VD), Measurement Date (MD).
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2022
-68-
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: 6/30/2020 (VD) 85,891,165$ 64,118,116 $ 21,773,049 $ Balance at: 6/30/2021 (MD) 91,909,207 79,863,904 12,045,303 Net changes during 2019-20 6,018,042$ 15,745,788 $ (9,727,746) $ Increase (Decrease)
Valuation Date (VD), Measurement Date (MD).
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 CalPERS’ website, at www.calpers.ca.gov. The City’s proportionate share of the net pension liability for the safety Plan as of the June 30, 2020 and 2021 measurement dates was as follows:
Safety Plan
Proportion - June 30, 2020 0.31272%
Proportion - June 30, 2021 0.32681%
Change - Increase (Decrease) 0.01409%
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 52,222,255$ 31,221,060 $ 13,915,345 $ Safety Plans' Net
Pension Liability 24,417,076$ 12,045,303 $ 1,883,420 $
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2022
-69-
11) RETIREMENT PLAN, (continued)
C) Changes in Net Pension Liability, (continued)
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
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, 2021 is 2.9 years, which was obtained by dividing the total service years of 2,031 (the sum of remaining service lifetimes of the active employees) by 709 (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, 2021 is 3.7 years, which was obtained by dividing the total service years of 561,622 (the sum of remaining service lifetimes of the active employees) by 150,648 (the total number of participants:
active, inactive, and retired) in PERF C. Inactive employees and retirees have remaining service lifetimes equal to 0. 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, 2022
-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, 2020), the net pension liability was $46,642,104. For the measurement period ending June 30, 2021 (the measurement date), the City incurred a pension expense of $2,788,769 for the Plan.
Safety – Cost Sharing, Multiple-Employer Defined Benefit Pension Plan
As of the start of the measurement period (July 1, 2020), the net pension liability for the safety plans is $21,773,049. For the measurement period ending June 30, 2021 (the measurement date), the City incurred a pension expense of $738,666 for the safety plan.
The aggregate amount of pension expenses for the Miscellaneous and Safety plans for the measurement period ending June 30, 2021 is $3,527,435.
As of June 30, 2022, 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 1,244,013 $ - $ 2,057,930$ - $ Changes of Assumptions - - - - Net Difference between Projected and
Actual Earnings on Pension Plan
Investments - (12,066,031) - (7,169,271) Change in Employer's Proportion - - 1,442,111 - Differences between the employer's
contributions and the employer's
proportionate share of contributions - - - (1,381,587) Pension Contributions Subsequent to
Measurement Date 5,497,462 - 3,121,569 - 6,741,475$ (12,066,031) $ 6,621,610 $ (8,550,858) $ SafetyMiscellaneous
These amounts above are net of outflows and inflows recognized in the 2020-21 measurement period expense. The $5,497,462 and $3,121,569 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.
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2022
-71-
11) RETIREMENT PLAN, (continued)
D) Pension Expense and Deferred Outflows and Deferred Inflows of Resources Related to Pensions, (continued)
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 $ (2,200,825) (635,034)$
2023 (2,418,855) (987,835)
2024 (2,891,506) (1,455,064)
2025 (3,310,832) (1,972,884)
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, 2022.
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, 2022, the City’s total payroll and covered payroll for part-time employees was $1,492,092. The City made employer contributions of $28,350 (1.9% of current covered payroll), and employees contributed $83,557 (5.6% of current covered payroll).
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2022
-72-
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 $149 per month in 2022.
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, 2021 measurement date, the following current and former employees were covered by the benefit terms under the Plan:
Active employees 217
Inactive employees or beneficiaries currently receiving benefits 44 Inactive employees entitled to, but not yet receiving benefits 10 Total 271
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2022
-73-
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, 2022, the City paid $301,131 for other postemployment benefits.
B) Total OPEB Liability
The City’s total OPEB liability was measur ed as of June 30, 2021 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, 2021 total OPEB liability, based on the following actuarial methods and assumptions:
Actuarial Assumptions June 30, 2021 Measurement Date
Actuarial Valuation Date June 30, 2020
Contribution Policy No pre-funding
Discount Rate 2.16% at June 30, 2021 (Bond Buyer 20-Bond Index)
2.21% at June 30, 2020 (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 Non-Medicare – 7.0% for 2022, decreasing to an ultimate rate of 4.0% in 2076
Medicare (Non-Kaiser) – 6.1% for 2022, decreasing to
an ultimate rate of 4.0% in 2076
Medicare (Kaiser) – 5.0% for 2022, decreasing to an
ultimate rate of 4% in 2076
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 2.16 percent was used in the valuation for measurement date June 30, 2021.
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2022
-74-
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, 2021
(6/30/20 measurement date) 9,787,004 $
Changes recognized for the measurement period:
Service cost 616,808
Interest 226,597
Changes of assumptions 72,371
Benefit payments (301,131)
Net changes 614,645
Balance at June 30, 2022
(6/30/21 measurement date) 10,401,649$
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, 2021:
1% Decrease
(1.16%)
Current Discount
Rate (2.16%)
1% Increase
(3.16%)
Total OPEB Liability 12,036,728$ 10,401,649 $ 9,092,903 $
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, 2021:
1% Decrease
Current Healthcare
Cost Trend Rates 1% Increase
Total OPEB Liability 8,737,294$ 10,401,649 $ 12,566,467 $ City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2022
-75-
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, 2021 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, 2022, th e City recognized OPEB expense of $787,962.
As of fiscal year ended June 30, 2022, 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 $ 321,148 $ 1,057,270 Changes of assumptions 1,448,704 410,962
Contributions to OPEB plan subsequent to the measurement date 288,074 - Total 2,057,926 $ 1,468,232 $
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2022
-76-
12) OTHER POSTEMPLOYMENT BENEFITS (OPEB), (continued)
B) Net OPEB Liability, (continued)
OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB, (continued)
The $288,074 reported as deferred outflows of resources related to contributions subsequent to the June 30, 2021 measurement date will be recognized as a reduction of the total OPEB liability during the fiscal year ending June 30, 2022. 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
2023 (56,089) $
2024 (56,089)
2025 (56,089)
2026 (7,089)
2027 39,911
Thereafter 437,065
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, 2022
-77-
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, 2022
-78-
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 2021-22.
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2022
-79-
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, 2022, the City had $745,873 on deposit with PASIS and claims payable of $1,193,859.
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, 2022
-80-
14) JOINT VENTURES, (continued)
North County Dispatch Joint Powers Authority, (continued)
Summarized audited information of the JPA for the fiscal year ended June 30, 2022, the most current available information, is as follows:
Assets $ 11,906,725
Deferred outflows 2,458,971
Liabilities (1,893,831)
Deferred inflows (707,869)
Net position $ 11,763,996
Revenues $ 8,907,116
Expenses (5,018,014)
Change in net position $ 3,889,102
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 $6,534,134 as of June 30, 2022. 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, 2022
-81-
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, 2022
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 6,861,185$ City of San Marcos Community Facilities District
No. 99-01, Special Tax Refunding Bonds,
Series 2021 (Improvement Area C2B, I1, I2) 9,720,000 9,155,000 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 9,925,000
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 15,030,000
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 23,005,000
Total 92,070,000$ 63,976,185 $
Type of Debt
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2022
-82-
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, 2022
$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 $ 36,265,000
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, 2022
-83-
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, 2022
-84-
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, 2022.
The following lists the components of the net investment in the direct financing lease as of June 30, 2022:
Total minimum lease payments to be received $ 2,828,982 Less unearned income (1,341,436)
Net investment in direct financing lease $ 1,487,546
At June 30, 2022, the future minimum lease payments are as follows:
Year Ending
June 30, Amount
2023 178,508 $
2024 122,745
2025 130,055
2026 137,801
2027 142,310
2028-2032 776,127
Total 1,487,546 $
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2022
-85-
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, 2022:
Balance Balance Due Within
June 30, 2021 Additions Deletions June 30, 2022 One Year Bonds payable 217,495,000$ - $ (12,800,000)$ 204,695,000 $ 13,210,000 $ Plus (less) deferred amounts: .
Issuance premium 8,598,950 - (505,822) 8,093,128 - Issuance discount (1,574,425) - 157,442 (1,416,983) - Total bonds payable 224,519,525 - (13,148,380) 211,371,145 13,210,000 Cooperation agreement 23,275,296 - - 23,275,296 - Advance from San Marcos
Affordable Housing Fund 7,254,663 - (2,500,000) 4,754,663 - Due to other governments - - - - - Total 255,049,484$ - $ (15,648,380)$ 239,401,104 $ 13,210,000 $
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2022
-86-
17) SUCCESSOR AGENCY TRUST FOR ASSETS OF FORMER REDEVELOPMENT AGENCY, (continued)
Bonds Payable
$ 33,565,000
63,815,000
107,315,000
Total bonds payable 204,695,000$
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, 2022
-87-
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 from 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 $7,052,139 (calculated as the difference between the debt service payments under the old and new debt discounted to present value using the effective interest rate).
Bond debt service requirements to maturity are as follows:
Year Ending
June 30
2023 13,210,000$ 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 15,210,000 8,604,097 23,814,097
2028-2032 78,135,000 29,936,468 108,071,468
2033-2037 47,375,000 8,878,692 56,253,692
2038-2040 9,000,000 680,775 9,680,775
Total 204,695,000$ 89,126,021 $ 293,821,021 $
TotalPrincipal Interest
City of San Marcos
Notes to Basic Financial Statements
For the Year Ended June 30, 2022
-88-
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
4,754,663$
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, 2022
-89-
18) OTHER REQUIRED NOTE DISCLOSURES
Deficit Fund Balances
As of June 30, 2022, the following non-major funds presented a negative fund balance.
Special Revenue Funds
Street Lighting District (71,974) $
Senior Nutrition Grant (83,875)
Governmental Funds - Non-Major
The Capital Projects Fund’s deficit fund balance will be remedied by requesting reimbursement of CIP expenses.
REQUIRED SUPPLEMENTARY
INFORMATION
City of San Marcos
Required Supplementary Information
Schedule of Changes in Net Pension Liability and Related Ratios Last Ten Years*
-90-
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: There were no assumption changes for 2021. 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 compute da sal e v e l 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 establ ished 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 th eC a l P E R S Experience Study and Review of Actuarial Assumptions December 2017. There were no changes in the discount rate in 2019. In 2017, the accounting discount rate was reduced from 7.65 percent to 7.15 percent. In 2016, there were no changes in the discount rate. In 2015, amounts reported reflect an adjustment of the di scount rate from 7.5 percent (net of administrative expense) to 7.65 percent (without a reduction for pension plan administrative expense). In 2014, amounts rep orted 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*
-91-
Miscellaneous Plan, (continued)
Measurement Measurement Measurement Measurement
Period Period Period Period
6/30/2018 6/30/2019 6/30/2020 6/30/2021
TOTAL PENSION LIABILITY
Service Cost 2,898,829$ 2,938,266 $ 2,703,721 $ 2,546,641 $ Interest 9,287,287 9,846,868 10,335,678 10,782,695 Difference Between Expected and Actual Experience 283,350 2,125,402 1,290,024 1,095,442 Changes of Assumptions (933,150) - - - Benefit Payments, Including Refunds of Employee Contributions (6,202,870) (6,806,974) (7,435,808) (8,172,791) Net Change in Total Pension Liability 5,333,446 8,103,562 6,893,615 6,251,987 Total Pension Liability - Beginning 132,193,941 137,527,387 145,630,949 152,524,564 Total Pension Liability - Ending (a) 137,527,387 $ 145,630,949 $ 152,524,564 $ 158,776,551 $
PLAN FIDUCIARY NET POSITION
Net Plan to Plan Resource Movement (225) $ - $ - $ - $ Contributions - Employer 4,278,656 4,615,503 5,080,583 4,969,430 Contributions - Employee 1,126,769 1,104,152 1,102,880 946,753 Net Investment Income 7,721,226 6,421,470 5,149,684 24,035,409 Benefit Payments, Including Refunds of Employee Contributions (6,202,870) (6,806,974) (7,435,808) (8,172,791) Administrative Expense (140,788) (69,124) (143,977) (105,770) Other Miscellaneous Income/(Expense)1
(267,358) 225 - - Net Change in Fiduciary Net Position 6,515,410 5,265,252 3,753,362 21,673,031 Plan Fiduciary Net Position - Beginning 90,348,436 96,863,846 102,129,098 105,882,460 Plan Fiduciary Net Position - Ending (b) 96,863,846 $ 102,129,098 $ 105,882,460 $ 127,555,491 $ Plan Net Pension Liability - Ending (a) - (b) 40,663,541 $ 43,501,851 $ 46,642,104 $ 31,221,060 $ Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 70.43% 70.13% 69.42% 80.34% Covered Payroll 14,197,035$ 14,148,630 $ 13,872,161 $ 11,811,814 $ Plan Net Pension Liability as a Percentage of Covered Payroll 286.42% 307.46% 336.23% 264.32%
City of San Marcos
Required Supplementary Information
Schedule of Plan Contributions – Agent Plan
Last Ten Years*
-92-
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% 6/30/2022 5,497,462 (5,497,462) - 13,535,022 40.62% 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, 2020, 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 2021-22 were from the June 30, 2020, 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*
-93-
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% 6/30/2021 0.222720% 12,045,303 6,838,996 176.13% 86.89% 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*
-94-
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% 6/30/2022 3,121,569 (3,121,569) - 7,274,045 42.91% 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.
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*
-95-
Fiscal Year 2017-18 2018-19 2019-20 2020-21 2021-2022
Measurement Period 2016-17 2017-18 2018-19 2019-20 2020-2021 Total OPEB Liability
Service cost 600,000 $ 533,323 $ 409,539 $ 454,666 $ 616,808 $ Interest 248,000 302,110 269,366 272,594 226,597 Differences between expected and
actual experience - (1,812,466) - 407,944 - Changes of assumptions (815,000) (130,218) 351,334 1,451,482 72,371 Benefit payments (206,000) (267,000) (227,858) (266,812) (301,131) Net change in total OPEB liability (173,000) (1,374,251) 802,381 2,319,874 614,645 Total OPEB liability - beginning 8,212,000 8,039,000 6,664,749 7,467,130 9,787,004 Net OPEB liability - ending 8,039,000 $ 6,664,749 $ 7,467,130 $ 9,787,004 $ 10,401,649 $ Plan fiduciary net position as a percentage
of the total OPEB liability 0.0% 0.0% 0.0% 0.0% 0.0%
Covered-employee payroll 25,017,697 $ 24,297,000 $ 23,281,622 $ 21,370,676 $ 24,093,404 $ Total OPEB liability as a percentage of
covered-employee payroll 32.1% 27.4% 32.1% 45.8% 43.2%
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 five 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, 2022
-96-
Variance with
Original Final Actual Final Budget
REVENUES
Taxes and special assessments 26,677,192$ 26,702,761 $ 28,354,042 $ 1,651,281 $ Licenses and permits 5,241,388 5,784,295 6,229,489 445,194 Intergovernmental 19,973,967 25,167,184 22,735,088 (2,432,096) Charges for services 17,340,451 17,668,567 20,530,129 2,861,562 Developer fees 11,500 11,500 16,981 5,481 Fines and forfeitures 461,800 81,800 68,465 (13,335) Investment and rental income 7,129,733 8,057,755 15,385,322 7,327,567 Miscellaneous 357,350 563,459 942,337 378,878 Total Revenues 77,193,381 84,037,321 94,261,853 10,224,532
EXPENDITURES
Current:
General government 26,206,761 36,030,151 30,630,065 5,400,086 Community development 6,683,839 8,114,765 7,655,634 459,131 Public safety 42,002,418 41,633,603 42,816,495 (1,182,892) Highways, streets and parks 7,952,933 10,117,229 7,871,875 2,245,354 Culture and recreation 3,599,137 3,759,853 3,690,542 69,311 Capital outlay - 232,174 - 232,174 Debt service:
Principal 693,078 654,539 616,492 38,047 Interest and fiscal charges 74,300 75,527 81,183 (5,656) Total Expenditures 87,212,466 100,617,841 93,362,286 7,255,555 Excess (Deficiency) of Revenues
over Expenditures (10,019,085) (16,580,520) 899,567 17,480,087
OTHER FINANCING SOURCES (USES)
Sale of capital assets - 392,325 396,367 4,042 Transfers in 7,105,500 4,805,500 4,220,708 (584,792) Transfers out (3,398,002) (11,410,136) (2,318,974) 9,091,162 Total Other Financing Sources (Uses) 3,707,498 (6,212,311) 2,298,101 8,510,412 Net Change in Fund Balance (6,311,587) (22,792,831) 3,197,668 25,990,499 Fund Balance, Beginning 116,736,764 116,736,764 116,736,764 - Fund Balance, Ending 110,425,177$ 93,943,933 $ 119,934,432 $ 25,990,499 $ 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, 2022
-97-
Variance with
Original Final Actual Final Budget
REVENUES
Developer fees 2,785,400$ 2,785,400 $ 3,533,471 $ 748,071 $ Investment and rental income 1,407,000 1,407,000 966,943 (440,057) Miscellaneous 619,000 619,000 432,506 (186,494) Total Revenues 4,811,400 4,811,400 4,932,920 121,520
EXPENDITURES
Current:
General government 445,627 375,942 418,518 (42,576) Community development 7,055,500 7,154,900 3,962,033 3,192,867 Total Expenditures 7,501,127 7,530,842 4,380,551 3,150,291 Excess (Deficiency) of Revenues
Over Expenditures (2,689,727) (2,719,442) 552,369 3,271,811
OTHER FINANCING SOURCES
Transfers in 142,500 142,500 142,500 - Transfers out - (530,000) - 530,000 Total Other Financing Sources 142,500 (387,500) 142,500 530,000 Net Change in Fund Balance (2,547,227) (3,106,942) 694,869 3,801,811 Fund Balance, Beginning 40,945,345 40,945,345 40,945,345 - Fund Balance, Ending 38,398,118$ 37,838,403 $ 41,640,214 $ 3,801,811 $ Budgeted Amounts
City of San Marcos
Notes to Required Supplementary Information
June 30, 2022
-98-
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
-99-
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
-100-
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
-101-
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, 2022
-102-
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) 33,301,740 $ 513,840 $ 44,059,141$ 77,874,721 $ Cash and investments with fiscal agents (note 2) - 94,190 707,223 801,413 Receivables:
Taxes and special assessments 31,313 - - 31,313 Accounts 68,289 - 16,374 84,663 Interest 39,606 488 51,824 91,918 Notes, net (note 3) 2,005,881 - - 2,005,881 Other, net (note 4) - - 120,516 120,516 Due from other governments 917,845 - - 917,845 Total Assets 36,364,674 $ 608,518 $ 44,955,078$ 81,928,270 $
RESOURCES AND FUND BALANCES
Liabilities:
Accounts payable 1,017,821 $ - $ - $ 1,017,821$ Accrued liabilities 202,024 - 6,983 209,007 Due to other governments - - 9,300 9,300 Due to other funds (note 5) 77,710 - - 77,710 Deposits payable 10,389 - - 10,389 Total Liabilities 1,307,944 - 16,283 1,324,227 Unavailable revenue (note 6) 2,026,525 - 136,890 2,163,415 Restricted:
Transportation 11,937,418 - 432,034 12,369,452 Lighting and landscape 17,669,362 - - 17,669,362 Capital improvements - - 999,771 999,771 Public facilities - - 43,370,100 43,370,100 Other purposes 3,579,274 608,518 - 4,187,792 Unassigned (155,849) - - (155,849) Total Fund Balances 33,030,205 608,518 44,801,905 78,440,628 Total Liabilities, Deferred Inflows of
Resources and Fund Balances 36,364,674 $ 608,518 $ 44,955,078$ 81,928,270 $
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, 2022
-103-
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 9,660,680 $ - $ - $ 9,660,680$ Intergovernmental 6,092,773 - 1,139,630 7,232,403 Developer fees 78,420 - 9,330,294 9,408,714 Investment and rental income (653,378) 566,947 (888,951) (975,382) Miscellaneous 242,492 - - 242,492 Total Revenues 15,420,987 566,947 9,580,973 25,568,907
EXPENDITURES
Current:
Community development 623,161 - - 623,161 Highways, streets and parks 9,613,307 - 50,865 9,664,172 Culture and recreation 394,114 - - 394,114 Capital outlay - - 44,454 44,454 Debt service:
Principal 91,106 335,000 - 426,106 Interest and fiscal charges 5,861 57,295 - 63,156 Total Expenditures 10,727,549 392,295 95,319 11,215,163 Excess (Deficiency) of Revenues
Over (Under) Expenditures 4,693,438 174,652 9,485,654 14,353,744
OTHER FINANCING SOURCES (USES)
Transfers in (note 5) 955,502 - - 955,502 Transfers out (note 5) (2,185,536) - (3,298,273) (5,483,809) Total Other Financing Sources (Uses) (1,230,034) - (3,298,273) (4,528,307) Net Change in Fund Balances 3,463,404 174,652 6,187,381 9,825,437 Fund Balances, Beginning 29,566,801 433,866 38,614,524 68,615,191 Fund Balances, Ending 33,030,205 $ 608,518 $ 44,801,905$ 78,440,628 $ City of San Marcos
Combining Balance Sheet
Non-Major Special Revenue Funds
June 30, 2022
-104-
Community Street Senior Community
Traffic Facilities Lighting Nutrition Development
Gas Tax Safety District 98-02 District Grant Block Grant Cash and investments 3,259,744 $ 1,154,993 $ 18,235,878 $ 95,875 $ - $ 289,581$ Receivables:
Taxes and special assessments - - 29,073 1,509 - - Accounts - - 21,387 466 - - Interest 4,008 1,428 22,544 - - - Notes, net - - - - - - Due from other governments 177,406 12,386 - - 14,950 385,571 Total Assets 3,441,158 $ 1,168,807 $ 18,308,882 $ 97,850 $ 14,950 $ 675,152 $
RESOURCES AND FUND BALANCES
Liabilities:
Accounts payable 168,833 $ - $ 529,008$ 158,688 $ 15,876 $ 141,623 $ Accrued liabilities 83,058 - 91,386 11,064 5,239 11,230 Due to other funds - - - - 77,710 - Deposits payable - 10,389 - - - - Total Liabilities 251,891 10,389 620,394 169,752 98,825 152,853 Unavailable revenue - - 19,126 72 - - Restricted
Transportation 3,189,267 1,158,418 - - - - Lighting and landscape - - 17,669,362 - - - Other purposes - - - - - 522,299 Unassigned - - - (71,974) (83,875) - Total Fund Balances 3,189,267 1,158,418 17,669,362 (71,974) (83,875) 522,299 Total Liabilities, Deferred Inflows of
Resources, and Fund Balances 3,441,158 $ 1,168,807 $ 18,308,882 $ 97,850 $ 14,950 $ 675,152 $ Fund Balances (Deficit):
Deferred Inflows of Resources:
LIABILITIES, DEFERRED INFLOWS OF
ASSETS
-105-
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 152,113$ 139,007 $ 965,156 $ 1,455,875 $ 3,714,099 $ 343,722 $ 95,721 $ 3,399,976$ 33,301,740 $ .
- - - - 731 - - - 31,313 - - - 42,019 4,417 - - - 68,289 - 168 1,176 1,841 4,485 - - 3,956 39,606 1,400,487 - - - - 605,394 - - 2,005,881 - - - - - - - 327,532 917,845 1,552,600$ 139,175 $ 966,332 $ 1,499,735 $ 3,723,732 $ 949,116 $ 95,721 $ 3,731,464$ 36,364,674 $ -$ 2,025 $ - $ - $ 1,167 $ - $ 601 $ - $ 1,017,821$ - - - - - - 47 - 202,024 - - - - - - - - 77,710 - - - - - - - - 10,389 - 2,025 - - 1,167 - 648 - 1,307,944 1,400,487 - - - 1,446 605,394 - - 2,026,525 - 137,150 - - 3,721,119 - - 3,731,464 11,937,418 - - - - - - - - 17,669,362 152,113 - 966,332 1,499,735 - 343,722 95,073 - 3,579,274 - - - - - - - - (155,849) 152,113 137,150 966,332 1,499,735 3,721,119 343,722 95,073 3,731,464 33,030,205 1,552,600$ 139,175 $ 966,332 $ 1,499,735 $ 3,723,732 $ 949,116 $ 95,721 $ 3,731,464$ 36,364,674 $
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, 2022
-106-
Community Street Senior Community
Traffic Facilities Lighting Nutrition Development
Gas Tax Safety District 98-02 District Grant Block Grant
REVENUES
Taxes and special assessments - $ - $ 8,190,225$ 530,080 $ - $ - $ Intergovernmental 2,284,845 133,595 - - 64,968 1,656,256 Developer fees - - - - - - Investment and rental income (67,352) (24,204) (399,309) 40 - - Miscellaneous - - - - 21,839 - Total Revenues 2,217,493 109,391 7,790,916 530,120 86,807 1,656,256
EXPENDITURES
Current:
Community development - - - - - 622,255 Highways, streets and parks 2,065,663 37,062 6,113,536 1,368,231 - - Culture and recreation - - - - 339,299 - Debt Service:
Principal - - 67,145 23,961 - - Interest and fiscal charges - - 4,320 1,541 - - Total Expenditures 2,065,663 37,062 6,185,001 1,393,733 339,299 622,255 Excess (Deficiency) of Revenues
Over (Under) Expenditures 151,830 72,329 1,605,915 (863,613) (252,492) 1,034,001
OTHER FINANCING SOURCES (USES)
Transfers in - - - 772,502 183,000 - Transfers out - (64,761) (720,708) - - (994,782) Total Other Financing Sources (Uses) - (64,761) (720,708) 772,502 183,000 (994,782) Net Change in Fund Balances 151,830 7,568 885,207 (91,111) (69,492) 39,219 Fund Balances (Deficit), Beginning 3,037,437 1,150,850 16,784,155 19,137 (14,383) 483,080 Fund Balances (Deficit), Ending 3,189,267 $ 1,158,418 $ 17,669,362 $ (71,974) $ (83,875) $ 522,299 $
-107-
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 -$ 26,104$ - $ 168,945$ 745,326 $ - $ - $ - $ 9,660,680$ 24,781 - - - - - - 1,928,328 6,092,773 - - 57,526 - - - 20,894 - 78,420 11,780 (2,972) (20,736) (31,576) (76,682) 34,435 - (76,802) (653,378) 57,075 - - - - 163,578 - - 242,492 93,636 23,132 36,790 137,369 668,644 198,013 20,894 1,851,526 15,420,987 - - - - - - 906 - 623,161 - 3,791 - 23,241 1,783 - - - 9,613,307 - - 54,815 - - - - - 394,114 - - - - - - - - 91,106 - - - - - - - - 5,861 - 3,791 54,815 23,241 1,783 - 906 - 10,727,549 93,636 19,341 (18,025) 114,128 666,861 198,013 19,988 1,851,526 4,693,438 - - - - - - - - 955,502 - - - (115,137) - - - (290,148) (2,185,536) - - - (115,137) - - - (290,148) (1,230,034) 93,636 19,341 (18,025) (1,009) 666,861 198,013 19,988 1,561,378 3,463,404 58,477 117,809 984,357 1,500,744 3,054,258 145,709 75,085 2,170,086 29,566,801 152,113$ 137,150 $ 966,332 $ 1,499,735 $ 3,721,119 $ 343,722 $ 95,073 $ 3,731,464$ 33,030,205 $
This page intentionally left blank.
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, 2022
-108-
Variance with
Original Final Actual Final Budget
REVENUES
Intergovernmental 2,476,901 $ 2,476,901 $ 2,284,845 $ (192,056) $ Investment and rental income 34,000 34,000 (67,352) (101,352) Total Revenues 2,510,901 2,510,901 2,217,493 (293,408)
EXPENDITURES
Current:
Highways, streets and parks 2,219,431 2,194,873 2,065,663 129,210 Total Expenditures 2,219,431 2,194,873 2,065,663 129,210 Excess (deficiency) of
revenues over expenditures 291,470 316,028 151,830 (164,198)
OTHER FINANCING SOURCES (USES)
Transfers out - (3,798,438) - 3,798,438 Total other financing
sources (uses) - (3,798,438) - 3,798,438 Net Change in Fund Balance 291,470 (3,482,410) 151,830 3,634,240 Fund Balance, Beginning 3,037,437 3,037,437 3,037,437 - Fund Balance, Ending 3,328,907 $ (444,973) $ 3,189,267 $ 3,634,240 $ 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, 2022
-109-
Variance with
Original Final Actual Final Budget
REVENUES
Intergovernmental 125,000 $ 125,000 $ 133,595 $ 8,595 $ Investment and rental income 6,000 6,000 (24,204) (30,204) Total Revenues 131,000 131,000 109,391 (21,609)
EXPENDITURES
Current:
Highways, streets and parks 185,000 306,830 37,062 269,768 Total Expenditures 185,000 306,830 37,062 269,768 Excess (deficiency) of
revenues over expenditures (54,000) (175,830) 72,329 248,159
OTHER FINANCING SOURCES (USES)
Transfers out - (100,000) (64,761) 35,239 Total other financing
sources (uses) - (100,000) (64,761) 35,239 Net Change in Fund Balance (54,000) (275,830) 7,568 283,398 Fund Balance, Beginning 1,150,850 1,150,850 1,150,850 - Fund Balance, Ending 1,096,850 $ 875,020 $ 1,158,418 $ 283,398 $ 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, 2022
-110-
Variance with
Original Final Actual Final Budget
REVENUES
Taxes and special assessments 6,610,000 $ 6,610,000 $ 8,190,225 $ 1,580,225 $ Investment and rental income 238,000 238,000 (399,309) (637,309) Miscellaneous 2,500 2,500 - (2,500) Total Revenues 6,850,500 6,850,500 7,790,916 940,416
EXPENDITURES
Current:
Highways, streets and parks 5,026,900 6,546,561 6,113,536 433,025 Debt Service:
Principal 65,166 67,145 67,145 - Interest and fiscal charges 6,299 4,320 4,320 - Total Expenditures 5,098,365 6,618,026 6,185,001 433,025 Excess of Revenues Over
Expenditures 1,752,135 232,474 1,605,915 1,373,441
OTHER FINANCING SOURCES (USES)
Transfers out - (768,047) (720,708) 47,339 Total Other Financing
Sources (Uses) - (768,047) (720,708) 47,339 Net Change in Fund Balance 1,752,135 (535,573) 885,207 1,420,780 Fund Balance, Beginning 16,784,155 16,784,155 16,784,155 - Fund Balance, Ending 18,536,290 $ 16,248,582 $ 17,669,362 $ 1,420,780 $ 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, 2022
-111-
Variance with
Original Final Actual Final Budget
REVENUES
Taxes and special assessments 530,000 $ 530,000 $ 530,080 $ 80 $ Investment and rental income - - 40 40 Total Revenues 555,000 555,000 530,120 (24,880)
EXPENDITURES
Current:
Highways, streets and parks 1,199,316 1,227,634 1,368,231 (140,597) Debt Service:
Principal 22,340 22,340 23,961 (1,621) Interest and fiscal charges 2,248 2,248 1,541 707 Total Expenditures 1,223,904 1,252,222 1,393,733 (141,511) Excess of Revenues Over (Under)
Expenditures (668,904) (697,222) (863,613) (166,391)
OTHER FINANCING SOURCES
Transfers in 660,000 660,000 772,502 112,502 Total Other Financing
Sources 660,000 660,000 772,502 112,502 Net Change in Fund Balance (8,904) (37,222) (91,111) (53,889) Fund Balance, Beginning 19,137 19,137 19,137 - Fund Balance (Deficit), Ending 10,233 $ (18,085) $ (71,974) $ (53,889) $ 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, 2022
-112-
Variance with
Original Final Actual Final Budget
REVENUES
Intergovernmental 86,000 $ 86,000 $ 64,968 $ (21,032) $ Investment and rental income - 400 - (400) Miscellaneous 30,700 30,700 21,839 (8,861) Total Revenues 116,700 117,100 86,807 (30,293)
EXPENDITURES
Current:
Culture and recreation 346,687 349,955 339,299 10,656 Total Expenditures 346,687 349,955 339,299 10,656 Excess of Revenues (Deficiency)
Over (Under) Expenditures (229,987) (232,855) (252,492) (19,637)
OTHER FINANCING SOURCES (USES)
Transfers in 181,000 181,000 183,000 2,000 Total Other Financing
Sources (Uses) 181,000 181,000 183,000 2,000 Net Change in Fund Balance (48,987) (51,855) (69,492) (17,637) Fund Balance (Deficit), Beginning (14,383) (14,383) (14,383) - Fund Balance (Deficit), Ending (63,370) $ (66,238) $ (83,875) $ (17,637) $ 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, 2022
-113-
Variance with
Original Final Actual Final Budget
REVENUES
Intergovernmental 1,976,645 $ 2,403,131 $ 1,656,256 $ (746,875) $ Total Revenues 1,976,645 2,403,131 1,656,256 (746,875)
EXPENDITURES
Current:
Community development 1,234,191 1,484,199 622,255 861,944 Total Expenditures 1,234,191 1,484,199 622,255 861,944 Excess (deficiency) of
revenues over expenditures 742,454 918,932 1,034,001 115,069
OTHER FINANCING SOURCES (USES)
Transfers out - (1,606,624) (994,782) 611,842 Total other financing
sources (uses) - (1,606,624) (994,782) 611,842 Net Change in Fund Balance 742,454 (687,692) 39,219 726,911 Fund Balance, Beginning 483,080 483,080 483,080 - Fund Balance, Ending 1,225,534 $ (204,612) $ 522,299 $ 726,911 $ 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, 2022
-114-
Variance with
Original Final Actual Final Budget
REVENUES
Taxes and special assessments 21,000 $ 21,000 $ 26,104 $ 5,104 $ Investment and rental income 2,000 2,000 (2,972) (4,972) Total Revenues 23,000 23,000 23,132 132
EXPENDITURES
Current:
Highways, streets and parks 29,920 29,920 3,791 26,129 Total Expenditures 29,920 29,920 3,791 26,129 Excess of Revenues Over
Expenditures (6,920) (6,920) 19,341 26,261
OTHER FINANCING SOURCES (USES)
Transfers out - (20,500) - 20,500 Total Other Financing
Sources (Uses) - (20,500) - 20,500 Net Change in Fund Balance (6,920) (27,420) 19,341 46,761 Fund Balance, Beginning 117,809 117,809 117,809 - Fund Balance, Ending 110,889 $ 90,389 $ 137,150 $ 46,761 $ 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, 2022
-115-
Variance with
Original Final Actual Final Budget
REVENUES
Developer fees 20,000 $ 20,000 $ 57,526 $ 37,526 $ Investment and rental income 13,000 13,000 (20,736) (33,736) Total Revenues 33,000 33,000 36,790 3,790
EXPENDITURES
Current:
Culture and recreation 185,000 185,000 54,815 130,185 Total Expenditures 185,000 185,000 54,815 130,185 Net Change in Fund Balance (152,000) (152,000) (18,025) 133,975 Fund Balance, Beginning 984,357 984,357 984,357 - Fund Balance, Ending 832,357 $ 832,357 $ 966,332 $ 133,975 $ 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, 2022
-116-
Variance with
Original Final Actual Final Budget
REVENUES
Taxes and special assessments 130,000$ 130,000 $ 168,945 $ 38,945 $ Investment and rental income 30,000 30,000 (31,576) (61,576) Total Revenues 160,000 160,000 137,369 (22,631)
EXPENDITURES
Current:
Highways, streets and parks 100,000 100,000 23,241 76,759 Total Expenditures 123,241 100,000 23,241 76,759 Excess (deficiency) of
revenues over expenditures 36,759 60,000 114,128 54,128
OTHER FINANCING SOURCES
(USES)
Transfers out - (283,410) (115,137) 168,273 Total other financing
sources (uses) - (283,410) (115,137) 168,273 Net Change in Fund Balance 36,759 (223,410) (1,009) 222,401 Fund Balance, Beginning 1,500,744 1,500,744 1,500,744 - Fund Balance, Ending 1,537,503 $ 1,277,334 $ 1,499,735 $ 222,401 $ 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, 2022
-117-
Variance with
Original Final Actual Final Budget
REVENUES
Taxes and special assessments 543,000$ 543,000 $ 745,326 $ 202,326 $ Investment and rental income 12,000 12,000 (76,682) (88,682) Total Revenues 555,000 555,000 668,644 113,644
EXPENDITURES
Current:
Highway, streets and parks 2,000 2,000 1,783 217 Total expenditures 2,000 2,000 1,783 217 Net Change in Fund Balance 553,000 553,000 666,861 113,861 Fund Balance, Beginning 3,054,258 3,054,258 3,054,258 - Fund Balance, Ending 3,607,258 $ 3,607,258 $ 3,721,119 $ 113,861 $ 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, 2022
-118-
Variance with
Original Final Actual Final Budget
REVENUES
Investment and rental income 161,000 $ 161,000 $ 34,435 $ (126,565) $ Miscellaneous - - 163,578 163,578 Total Revenues 161,000 161,000 198,013 37,013
EXPENDITURES
Current:
Community development 150,000 150,000 - 150,000 Total Expenditures 150,000 150,000 - 150,000 Net Change in Fund Balance 11,000 11,000 198,013 187,013 Fund Balance, Beginning 145,709 145,709 145,709 - Fund Balance, Ending 156,709 $ 156,709 $ 343,722 $ 187,013 $ 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, 2022
-119-
Variance with
Original Final Actual Final Budget
REVENUES
Developer fees 15,000 $ 15,000 $ 20,894 $ 5,894 $ Total Revenues 15,000 15,000 20,894 5,894
EXPENDITURES
Current:
Community development 2,000 2,000 906 1,094 Total Expenditures 2,000 2,000 906 1,094 Net Change in Fund Balance 13,000 13,000 19,988 6,988 Fund Balance, Beginning - 75,085 75,085 - Fund Balance, Ending 13,000 $ 88,085 $ 95,073 $ 6,988 $ 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, 2022
-120-
Variance with
Original Final Actual Final Budget
REVENUES
Intergovernmental 1,922,592 $ 1,922,592 $ 1,928,328 $ 5,736 $ Investment and rental income 25,000 25,000 (76,802) (101,802) Total Revenues 1,947,592 1,947,592 1,851,526 (96,066)
OTHER FINANCING SOURCES (USES)
Transfers out - (1,665,445) (290,148) 1,375,297 Total other financing
sources (uses) - (1,665,445) (290,148) 1,375,297 Net Change in Fund Balances 1,947,592 282,147 1,561,378 1,279,231 Fund Balances, Beginning 2,170,086 2,170,086 2,170,086 - Fund Balances, Ending 4,117,678 $ 2,452,233 $ 3,731,464 $ 1,279,231 $ Budgeted Amounts
This page intentionally left blank.
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, 2022
-121-
Variance with
Original Final Actual Final Budget
REVENUES
Investment and rental income 551,000 $ 551,000 $ 566,947 $ 15,947 $ Total Revenues 551,000 551,000 566,947 15,947
EXPENDITURES
Debt service:
Principal 335,000 335,000 335,000 - Interest and fiscal charges 57,395 57,395 57,295 100 Total Expenditures 392,395 392,395 392,295 100 Net Change in Fund Balance 158,605 158,605 174,652 16,047 Fund Balance, Beginning 433,866 433,866 433,866 - Fund Balance, Ending 592,471 $ 592,471 $ 608,518 $ 16,047 $ Budgeted Amounts
City of San Marcos
Combining Balance Sheet
Non-Major Capital Projects Funds
June 30, 2022
-122-
Community
Public Facilities Transportation
Facility District 99-1 Sales Tax
Cash and investments 43,331,135 $ 5,396 $ 349,401 $ Cash and investments with
fiscal agents - 707,223 - Receivables:
Accounts 16,374 - -
Interest 50,795 6 569
Other, net 120,516 - -
Total Assets 43,518,820 $ 712,625 $ 349,970 $
LIABILITIES, DEFERRED INFLOWS OF
RESOURCES AND FUND BALANCES
Accrued liabilities 2,530 $ - $ 4,453 $ Due to other governments 9,300 - - Total Liabilities 11,830 - 4,453 Unavailable revenue 136,890 - - Restricted:
Transportation - - 345,517 Capital improvements - 712,625 - Public facilities 43,370,100 - - Total Fund Balances 43,370,100 712,625 345,517 Total Liabilities, Deferred Inflows of
Resources and Fund Balances 43,518,820$ 712,625 $ 349,970 $ Liabilities:
Deferred Inflows of Resources:
Fund Balances (Deficit):
ASSETS
-123-
Community
Facilities Transportation
District 02-01 Impact Fee Total
286,797$ 86,412 $ 44,059,141$
- - 707,223
- - 16,374
349 105 51,824
- - 120,516
287,146$ 86,517 $ 44,955,078$
-$ - $ 6,983 $
- - 9,300
- - 16,283
- - 136,890
- 86,517 432,034
287,146 - 999,771
- - 43,370,100
287,146 86,517 44,801,905
287,146$ 86,517 $ 44,955,078$
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, 2022
-124-
Community
Public Facilities Transportation
Facility District 99-1 Sales Tax
REVENUES
Intergovernmental - $ - $ 1,139,630$ Developer fees 9,330,294 - -
Investment and rental income (882,845) 152 1,558 Total Revenues 8,447,449 152 1,141,188
EXPENDITURES
Current:
Highways, streets and parks - - 50,865 Capital outlay 44,454 - -
Total Expenditures 44,454 - 50,865 Excess (Deficiency) of Revenues
Over (Under) Expenditures 8,402,995 152 1,090,323
OTHER FINANCING SOURCES
Transfers out (note 5) (2,820,926) - (477,347) Total Other Financing Sources (2,820,926) - (477,347) Net Change in Fund Balances 5,582,069 152 612,976 Fund Balances (Deficit), Beginning 37,788,031 712,473 (267,459) Fund Balances, Ending 43,370,100 $ 712,625 $ 345,517 $
-125-
Community
Facilities Transportation
District 02-01 Impact Fee Total
-$ - $ 1,139,630$
- - 9,330,294
(6,006) (1,810) (888,951)
(6,006) (1,810) 9,580,973
- - 50,865
- - 44,454
- - 95,319
(6,006) (1,810) 9,485,654
- - (3,298,273)
- - (3,298,273)
(6,006) (1,810) 6,187,381
293,152 88,327 38,614,524
287,146$ 86,517 $ 44,801,905$
City of San Marcos
Combining Statement of Fiduciary Net Position
Custodial Funds
June 30, 2022
-126-
Community Community Community Total
Facilities Facilities Facilities Custodial
District 88-1 District 99-1 District 02-01 Funds
Receivables:
Special assessments 755 $ 8,100 $ 1,665 $ 10,520 $ Interest 16 23 - 39 Restricted Assets:
Cash and investments with
fiscal agents (note 2) 2,715,413 5,991,993 802,028 9,509,434 Total Assets 2,716,184 6,000,116 803,693 9,519,993 Accounts payable 164,599 1,050 350 165,999 Due to other governments 3,825 2,354 9,271 15,450 Total Liabilities 168,424 3,404 9,621 181,449 Restricted for:
Other taxing entities and other agencies 2,547,760 $ 5,996,712 $ 794,072 $ 9,338,544 $
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, 2022
-127-
Community Community Community Total
Facilities Facilities Facilities Custodial
District 88-1 District 99-1 District 02-01 Funds
ADDITIONS
Tax 208 $ 10,146$ 326 $ 10,680$ Income from property and investments 1,474,547 4,985,986 657,210 7,117,743 Total Additions 1,474,755 4,996,132 657,536 7,128,423
DEDUCTIONS
Administrative expense 201,549 28,063 11,429 241,041 Payments to fiscal agent on behalf
of other agencies 1,233,338 5,076,427 921,085 7,230,850 Total Deductions 1,434,887 5,104,490 932,514 7,471,891 Change in Net Position 39,868 (108,358) (274,978) (343,468) Net Position, Beginning 2,507,892 6,105,070 1,069,050 9,682,012 Net Position, Ending 2,547,760 $ 5,996,712 $ 794,072 $ 9,338,544 $ Custodial Funds
This page intentionally left blank.
City of San Marcos
Statistical Section
-128-
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 129
Revenue Capacity 140
Debt Capacity 143
Demographic and Economic Information 149
Operating Information 153
These schedules contain service and infrastructure data to help the reader understand how the information in the City's financial report relates to the services the government provides and the activities it performs.
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 place.
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)
-129-
Fiscal Year
2013 2014 2015 2016
Governmental Activities:
Net investment in capital assets 646,769,141 $ 671,633,533 $ 647,192,005 $ 623,187,760 $ Restricted for:
Affordable housing 160,939,069 162,388,168 174,239,971 182,174,655 Lighting and landscape 9,706,762 10,141,062 11,266,533 12,073,491 Public facilities 20,320,721 21,071,049 24,998,414 32,111,994 Other purposes 10,295,075 8,955,235 7,645,829 2,187,164 Endowment 1,195,768 1,000,000 1,000,000 - Unrestricted 57,252,131 60,074,433 3,482,542 48,523,274 Total governmental activities net position 906,478,667$ 935,263,480 $ 869,825,294 $ 900,258,338 $ Business-type activities:
Net investment in capital assets 26,725,626 $ 27,160,354 $ 34,101,091 $ - $ Unrestricted 5,761,171 4,352,951 2,552,732 94,924,105 Total business-type activities net position 32,486,797$ 31,513,305 $ 36,653,823 $ 94,924,105 $ Component unit:
Not expendable - $ - $ - $ 1,000,000$ Expendable - - - 157,923 Total component unit net position - $ - $ - $ 1,157,923$ Primary Government:
Net investment in capital assets 673,494,767 $ 698,793,887 $ 681,293,096 $ 623,187,760 $ Restricted for:
Affordable housing 160,939,069 162,388,168 174,239,971 182,174,655 Lighting and landscape 9,706,762 10,141,062 11,266,533 12,073,491 Capital improvements 20,320,721 21,071,049 24,998,414 32,111,994 Other purposes 10,295,075 8,955,235 7,645,829 2,187,164 Endowment 1,195,768 1,000,000 1,000,000 - Unrestricted 63,013,302 64,427,384 6,035,274 143,447,379 Total primary government net position 938,965,464$ 966,776,785 $ 906,479,117 $ 995,182,443 $ Component unit:
Restricted - $ - $ - $ 1,157,923$ Total component unit net position - $ - $ - $ 1,157,923$ Source: City of San Marcos, Finance Department
-130-
Fiscal Year
2017 2018 2019 2020 2021 2022
607,795,162$ 599,739,265 $ 600,656,145 $ 594,590,985 $ 591,038,322 $ 596,923,771 $ 192,984,712 197,267,954 204,874,361 214,394,691 222,040,542 227,818,434 12,410,105 12,833,499 14,734,771 15,104,188 16,803,353 17,688,560 36,384,666 3,186,646 1,008,537 1,004,808 1,005,625 43,506,990 2,461,175 44,845,897 42,359,172 51,842,888 54,134,938 19,957,186 - - - - - - 60,067,467 48,322,111 46,006,938 35,895,754 35,934,735 46,052,370 912,103,287$ 906,195,372 $ 909,639,924 $ 912,833,314 $ 920,957,515 $ 951,947,311 $ -$ - $ - $ - $ - $ - $ 95,225,519 94,972,155 95,293,994 96,901,655 97,147,813 92,682,011 95,225,519$ 94,972,155 $ 95,293,994 $ 96,901,655 $ 97,147,813 $ 92,682,011 $ 1,000,000$ 1,000,000 $ 1,000,000 $ 1,000,000 $ 1,000,000 $ 1,000,000 $ 230,885 258,593 250,742 219,405 475,316 216,026 1,230,885$ 1,258,593 $ 1,250,742 $ 1,219,405 $ 1,475,316 $ 1,216,026 $ 607,795,162$ 599,739,265 $ 600,656,145 $ 594,590,985 $ 591,038,322 $ 596,923,771 $ 192,984,712 197,267,954 204,874,361 214,394,691 222,040,542 227,818,434 12,410,105 12,833,499 14,734,771 15,104,188 16,803,353 17,688,560 36,384,666 3,186,646 1,008,537 1,004,808 1,005,625 43,506,990 2,461,175 44,845,897 42,359,172 51,842,888 54,134,938 19,957,186 - - - - - - 155,292,986 143,294,266 141,300,932 132,797,409 133,082,548 138,734,381 1,007,328,806$ 1,001,167,527 $ 1,004,933,918 $ 1,009,734,969 $ 1,018,105,328 $ 1,044,629,322 $ 1,230,885$ 1,258,593 $ 1,250,742 $ 1,219,405 $ 1,475,316 $ 1,216,026 $ 1,230,885$ 1,258,593 $ 1,250,742 $ 1,219,405 $ 1,475,316 $ 1,216,026 $
City of San Marcos
Changes in Net Position
Last Ten Fiscal Years
(accrual basis of accounting)
-131-
Fiscal Year
2013 2014 2015 2016
Expenses:
Governmental Activities:
General government 15,885,771 $ 16,447,263 $ 16,944,647 $ 18,256,401 $ Community development 6,379,029 3,431,958 7,094,841 12,890,498 Public safety 27,531,474 31,398,530 36,059,952 32,564,134 Highways, streets and parks 31,047,726 32,779,655 33,832,005 23,904,189 Culture and recreation 4,992,567 3,022,930 5,040,297 3,951,699 Interest on long-term debt 286,343 272,403 267,688 262,067 Total governmental activities expenses 86,122,910 87,352,739 99,239,430 91,828,988 Business-type activities:
Creekside Marketplace 866,501 1,061,134 2,053,600 2,069,680 Total business-type activities expenses 866,501 1,061,134 2,053,600 2,069,680 Total primary government expenses 86,989,411 88,413,873 101,293,030 93,898,668 Component Unit:
Permanent Fund Community
Foundation - - - 56,622 Total primary government expenses - $ - $ - $ 56,622$ Program Revenues:
Governmental Activities:
Charges for services:
General government (2) 8,616,200$ 7,515,771 $ 1,288,995 $ 1,843,724 $ Community development (2) 5,179,421 6,998,956 2,997,665 2,252,007 Public safety 8,012,187 8,636,601 8,888,703 9,103,730 Highways, streets and parks (1) (2) 6,943,057 8,462,005 7,455,240 8,196,772 Culture and recreation (2) 1,878,137 2,105,349 2,081,035 2,364,561 Operating grants and contributions 3,333,506 24,338,152 16,811,188 11,893,755 Capital contributions and grants 20,273,816 2,125,409 9,843,740 4,294,066 Total governmental activities program revenues 54,236,324 60,182,243 49,366,566 39,948,615 Business-type activities:
Charges for services:
Creekside Marketplace 3,907,546 4,103,722 3,470,369 3,335,509 Total business-type activities program revenues 3,907,546 4,103,722 3,470,369 3,335,509 Total primary government program revenues 58,143,870 64,285,965 52,836,935 43,284,124 Net (expenses) revenues:
Governmental activities (31,886,586) (27,170,496) (49,872,864) (51,880,373) Business-type activities 3,041,045 3,042,588 1,416,769 1,265,829 Total primary government net (expenses)/revenues (28,845,541)$ (24,127,908) $ (48,456,095) $ (50,614,544) $ Component Unit:
Permanent Fund Community
Foundation - - - (56,622) Total primary government net (expenses)/revenues - - - (56,622) 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
-132-
Fiscal Year
2017 2018 2019 2020 2021 2022
15,819,492$ 19,444,881 $ 24,545,665 $ 26,598,227 $ $24,133,604 $32,589,843 1,679,942 6,368,611 5,036,267 10,631,212 13,174,383 12,423,814 38,312,609 40,504,526 42,703,434 42,461,674 45,837,054 42,170,941 29,012,619 32,201,548 31,533,558 32,356,482 33,373,256 32,747,776 3,873,784 4,209,685 4,025,485 3,982,454 3,557,335 4,119,671 243,974 295,292 183,847 227,552 259,529 148,236 88,942,420 103,024,543 108,028,256 116,257,601 120,335,161 124,200,281 1,572,337 771,106 969,539 1,339,226 974,272 2,391,450 1,572,337 771,106 969,539 1,339,226 974,272 2,391,450 90,514,757 103,795,649 108,997,795 117,596,827 121,309,433 126,591,731 65,283 69,946 71,223 51,361 84,837 76,844 65,283$ 69,946 $ 71,223 $ 51,361 $ 84,837 $ 76,844 $ 1,151,920$ 1,038,094 $ 1,704,211 $ 1,580,692 $ 1,447,664 $ 1,384,202 $ 4,554,470 6,363,423 2,485,165 1,813,367 2,499,892 5,416,289 10,358,412 10,979,615 12,001,681 11,883,120 13,464,941 14,862,440 7,931,273 8,605,163 7,860,930 9,294,971 9,658,671 8,976,054 2,575,892 2,100,449 2,466,095 1,543,846 946,994 2,466,721 13,919,753 11,094,309 17,606,841 23,979,367 24,626,457 23,654,054 3,523,253 1,345,661 4,437,779 7,053,470 22,305,574 23,424,439 44,014,973 41,526,714 48,562,702 57,148,833 74,950,193 80,184,199 4,924,764 5,188,034 5,510,983 4,808,776 4,617,947 4,713,033 4,924,764 5,188,034 5,510,983 4,808,776 4,617,947 4,713,033 48,939,737 46,714,748 54,073,685 61,957,609 79,568,140 84,897,232 (44,927,447) (61,497,829) (59,465,554) (59,108,768) (45,384,968) (44,016,082) 3,352,427 4,416,928 4,541,444 3,469,550 3,643,675 2,321,583 (41,575,020)$ (57,080,901) $ (54,924,110) $ (55,639,218) $ (41,741,293) $ (41,694,499) $ (65,283) (69,946) (71,223) (51,361) (84,837) (76,844) (65,283) (69,946) (71,223) (51,361) (84,837) (76,844)
City of San Marcos
Changes in Net Position, (continued)
Last Ten Fiscal Years
(accrual basis of accounting)
-133-
Fiscal Year
2013 2014 2015 2016
General Revenues and Other Changes in Net
Positions:
Governmental activities:
Taxes:
Property taxes 12,734,479 $ 19,036,135 $ 14,730,525 $ 16,627,912 $ Tax increment, net 11,896,531 - - - Transient occupancy taxes 713,538 736,035 794,846 829,724 Business license 195,431 194,864 208,911 213,173 Franchise fees 2,713,099 2,582,279 3,520,613 3,907,803 Gain/(Loss) on sale of capital assets - - (659,841) 1,810,932 Motor vehicle license fees 42,071 80,791 - - Rental income - - 6,260,337 5,790,384 Sales tax shared state revenue and in lieu, unrestricted 13,836,852 14,596,011 15,840,511 16,209,302 Investment income 3,692,241 3,508,350 1,108,705 937,647 Other 1,160,059 1,991,861 489,778 982,947 Transfers 5,100,000 5,000,000 4,250,000 (3,850,425) Transfer to Successor Agency - (10,674,712) - - Extraordinary gain 280,624,874 - - - Total governmental activities 332,709,175 37,051,614 46,544,385 43,459,399 Business-type activities:
Investment income 137,198 5,469 50,190 8,184 Other - - - - Transfers (5,100,000) (5,000,000) (4,250,000) 3,850,425 Total business-type activities (4,962,802) (4,994,531) (4,199,810) 3,858,609 Total primary government 327,746,373 32,057,083 42,344,575 47,318,008 Component Unit:
Investment income, restricted - - - - Other - - - - Total primary government - - - - Change in Net Position:
Governmental activities 305,538,679 (12,821,250) (5,335,988) (1,468,048) Business-type activities (1,920,214) (3,577,762) (2,933,981) 7,211,036 Total primary government 303,618,465 $ (16,399,012) $ (8,269,969) $ 5,742,988 $ Component Unit:
Permanent Fund Community
Foundation - - - - Total primary government - $ - $ - $ - $ Source: City of San Marcos, Finance Department
-134-
Fiscal Year
2017 2018 2019 2020 2021 2022
18,604,256$ 19,825,953 $ 21,542,823 $ 24,982,707 $ 24,980,971 $ 26,695,907 $ - - - - - - 873,863 978,498 1,303,446 1,068,175 871,393 1,416,495 228,040 231,933 232,733 226,950 230,340 241,640 4,031,275 3,897,771 4,042,123 4,282,862 4,220,898 4,644,009 187,956 227,020 258,282 229,032 (74,079) 191,367 - - 49,502 79,818 72,985 111,588 5,950,030 5,556,365 5,477,226 5,140,403 7,290,221 5,626,286 16,868,051 16,418,302 17,274,843 19,306,999 17,308,573 21,966,581 1,731,178 1,242,804 1,305,351 10,303,109 2,031,411 10,062,092 529,653 96,331 223,593 982,103 1,026,771 549,913 4,500,000 3,317,138 5,000,000 3,500,000 3,400,000 3,500,000 - - - - - - - - - - - - 53,504,302 51,792,115 56,709,922 70,102,158 61,359,484 75,005,878 16,289 2,855 6,759 1,636,309 2,483 (3,287,385) - - - 1,802 - - (4,500,000) (3,317,138) (5,000,000) (3,500,000) (3,400,000) (3,500,000) (4,483,711) (3,314,283) (4,993,241) (1,861,889) (3,397,517) (6,787,385) 49,020,591 48,477,832 51,716,681 68,240,269 57,961,967 68,218,493 (11,645) 138,220 97,654 19,998 340,748 (182,446) - 25 - 26 - - (11,645) 138,245 97,654 20,024 340,748 (182,446) (7,993,527) (7,673,439) (2,398,846) 24,717,190 15,974,516 30,989,796 (66,783) 1,227,161 (1,523,691) 1,781,786 246,158 (4,465,802) (8,060,310)$ (6,446,278) $ (3,922,537) $ 26,498,976 $ 16,220,674 $ 26,523,994 $ (81,591) 67,022 46,293 (64,813) 255,911 (259,290) (81,591)$ 67,022 $ 46,293 $ (64,813) $ 255,911 $ (259,290) $
City of San Marcos
Fund Balances of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
-135-
2013 2014 2015 2016
Nonspendable 16,184,816 $ 11,938,509 $ 10,451,246 $ 10,031,405 $ Restricted - - - - Assigned - - 5,984,790 5,984,790 Unassigned 44,147,436 51,115,898 31,887,837 82,608,491 Total General Fund 60,332,252 63,054,407 48,323,873 98,624,686 Nonspendable 1,195,768 1,000,000 1,000,000 - Restricted 80,423,049 80,658,598 82,000,192 82,451,468 Unassigned - (225) (20) (33,867) Total all other governmental funds 81,618,817 81,658,373 83,000,172 82,417,601 Total governmental funds 141,951,069 $ 144,712,780 $ 131,324,045 $ 181,042,287 $ Source: City of San Marcos, Finance Department
Fiscal Year
-136-
Fiscal Year
2017 2018 2019 2020 2021 2022
66,369,312$ 65,059,911 $ 64,997,746 $ 62,506,999 $ 61,913,706 $ 74,313,510 $ - - - 2,492,150 2,889,350 2,398,726 11,653,634 11,313,621 11,059,665 10,023,351 11,864,630 11,864,630 27,053,317 28,500,274 30,443,892 32,505,397 40,069,078 31,357,566 105,076,263 104,873,806 106,501,303 107,527,897 116,736,764 119,934,432 - - - - - - 87,132,962 98,836,674 99,243,047 110,557,067 109,842,378 120,236,691 - (148,263) (378,551) (5,099,687) (11,385,046) (9,175,364) 87,132,962 98,688,411 98,864,496 105,457,380 98,457,332 111,061,327 192,209,225$ 203,562,217 $ 205,365,799 $ 212,985,277 $ 215,194,096 $ 230,995,759 $
City of San Marcos
Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
-137-
2013 2014 2015 2016
Revenues:
Taxes and special assessments (3) 40,050,764 $ 37,499,452 $ 40,746,406 $ 43,388,689 $ Licenses and permits 5,031,124 4,834,181 4,896,092 5,190,125 Intergovernmental (3) 16,273,969 14,879,876 11,705,953 8,388,620 Charges for services 14,423,983 14,014,737 14,767,944 15,644,089 Developer fees 12,333,859 604,325 3,085,839 5,680,240 Fines and forfeitures 171,675 379,517 378,143 492,091 Investment and rental income 8,108,512 8,390,525 9,159,541 9,887,780 Miscellaneous 1,656,624 2,784,337 1,307,048 3,003,475 Total Revenues 98,050,510 83,386,950 86,046,966 91,675,109 Expenditures:
Current:
General government (2) 15,237,915 15,683,539 16,082,210 15,769,553 Community development (2) 9,148,706 4,209,639 7,282,130 9,218,570 Public safety 27,156,685 30,863,346 35,743,282 33,512,449 Highways, streets and parks (1) (2) 13,407,088 21,875,374 20,669,923 16,739,415 Culture and recreation (1) 4,819,380 2,948,559 4,904,494 3,611,161 Tax increment distrib. to other gov. agencies - - - - SERAF payment - - - - Capital outlay 16,677,835 8,462,086 3,672,221 11,115,705 Debt service:
Principal retirement 342,996 430,447 570,876 677,198 Interest and fiscal charges 277,403 269,039 260,465 259,734 Cost of issuance - - - - Total expenditures 87,068,008 84,742,029 89,185,601 90,903,785 Excess/(deficiency) of Revenues Over Expenditures 10,982,502 (1,355,079) (3,138,635) 771,324 Other financing sources (uses):
Issuance of debt - - 12,752 1,036,580 Discount on bonds issued - - - - Proceeds from sale of capital assets 6,489 (659,841) - - Capital leases - 427,300 125,074 432,248 Partnership contributions - - (6,537,501) - Transfers in 11,511,222 5,227,487 5,911,842 6,441,564 Transfers out (17,185,934) (977,487) (9,762,267) (1,941,564) Total other financing sources (uses) (5,668,223) 4,017,459 (10,250,100) 5,968,828 Net Change in Fund Balances 5,314,279 $ 2,662,380 $ (13,388,735) $ 6,740,152 $ Debt service as a percentage of noncapital expenditures 0.81% 0.93% 0.95% 0.99% 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
-138-
Fiscal Year
2017 2018 2019 2020 2021 2022
28,386,492$ 30,734,448 $ 37,396,482 $ 35,074,453 $ 35,336,432 $ 38,014,722 $ 5,184,798 5,567,081 4,829,046 4,982,848 5,758,317 6,229,489 22,446,951 24,240,158 22,558,222 30,208,872 50,774,854 50,768,628 15,756,224 16,391,482 16,112,574 15,608,463 17,466,496 20,530,129 6,770,876 10,269,151 5,217,642 7,775,654 7,826,185 12,959,166 632,114 592,516 498,336 389,034 257,569 68,465 9,814,976 8,625,937 11,496,722 19,363,307 8,782,267 15,259,941 1,656,344 2,170,216 1,873,724 1,556,989 1,163,325 1,617,335 90,648,775 98,590,989 99,982,748 114,959,620 127,365,445 145,447,875 20,232,292 17,619,187 21,862,137 24,474,209 22,215,742 31,048,583 9,224,684 6,419,708 4,795,779 9,921,546 13,323,540 12,240,828 36,449,543 37,334,894 37,782,655 39,103,687 42,204,560 42,816,495 19,258,048 18,924,332 18,575,680 18,682,862 18,038,640 17,536,047 3,814,190 3,930,935 3,759,978 3,416,437 3,248,975 4,084,656 - - - - - - - - - - - - 10,255,091 6,235,184 19,258,698 16,762,011 31,070,090 24,629,033 970,360 1,474,503 860,105 907,466 1,111,330 1,042,598 286,705 246,947 155,238 219,983 225,850 144,339 - 108,311 - - - - 100,490,913 92,294,001 107,050,270 113,488,201 131,438,727 133,542,579 (9,842,138) 6,296,988 (7,067,522) 1,471,419 (4,073,282) 11,905,296 - - - - - - - - - - - - - - 4,521,104 1,138,302 2,427,572 396,367 2,018,392 - - 1,509,757 585,414 - - - - - - - 5,470,561 9,820,141 11,859,523 14,722,108 17,515,183 11,302,783 (2,153,423) (4,820,141) (7,509,523) (11,222,108) (14,115,183) (7,802,783) 5,335,530 5,000,000 8,871,104 6,148,059 6,412,986 3,896,367 (4,506,608)$ 11,296,988 $ 1,803,582 $ 7,619,478 $ 2,339,704 $ 15,801,663 $
1.42% 2.12% 1.07% 1.18% 1.28% 1.08%
City of San Marcos
Assessed Value and Estimated Actual Value of Taxable Property (1) Last Ten Fiscal Years
-139-
Fiscal
Year Secured Unsecured Less: Exemptions
Taxable
Assessed Value
Direct Tax
Rate (2)
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 2022 15,119,698,651 313,927,047 (753,940,771) 14,679,684,927 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 $100 of assessed value)
-140-
Direct Rate Overlapping Rates
Fiscal
Year
City of San
Marcos
San
Marcos
Unified
School
District
San
Marcos
Fire
Protection
District
San
Diego
County Others
Voter
Approved
Debt
Total Tax
Rate
(2)
2013 0.0883 % 0.3805 % 0.0632 % 0.2481 % 0.2200 % 0.0994 % 1.0994 % 2014 0.0883 0.3805 0.0632 0.2481 0.2200 0.0978 1.0978 2015 0.0883 0.3805 0.0632 0.2481 0.2200 0.1138 1.1138 2016 0.0883 0.3805 0.0632 0.2481 0.2200 0.1180 1.1180 2017 0.0883 0.3805 0.0632 0.2481 0.2200 0.1175 1.1175 2018 0.0883 0.3805 0.0632 0.2481 0.2200 0.0910 1.0911 2019 0.0883 0.3805 0.0632 0.2481 0.2200 0.0908 1.0908 2020 0.0883 0.3805 0.0632 0.2481 0.2200 0.0970 1.0970 2021 0.0883 0.3805 0.0632 0.2481 0.2200 0.0804 1.0804 2022 0.0883 0.3805 0.0632 0.2481 0.2200 0.0777 1.0777 Notes:
(1) Tax rates are for Tax Rate Area 13-066.
(2) In 1978, California voters passed Proposition 13 which sets the property tax rate at a 1% fixed amount. This 1% is shared by all taxing agencies in which the subject property resides. In addition to the 1% fixed amount, property owners are charged taxes as a percentage of assessed property values for the payment of various voter-approved bonds.
Source: San Diego County Auditor and Controller Office Allocation of 1% Ad Valorem Property Taxes
City of San Marcos
Property Tax Levies and Collections
Last Ten Fiscal Years (1)
-141-
Taxes Levied Collections in
Fiscal for the Fiscal Percentage Subsequent
Year Year Amount of Levy Years Amount Percentage
2013 5,900,446$ 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 8,081,654 97.87 2021 8,671,538 8,522,190 98.28 88,140 8,610,330 99.29 2022 9,291,999 8,889,705 95.67 N/A 8,889,705 95.67 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
-142-
Fiscal
Year
General
Obligation
Bonds
Revenue
Bonds
Notes
Payable Leases
Loans Payable
(3)
Total Primary
Government
Percentage
of Personal
Income
Per
Capita
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 0.08 58 2022 (4) - - - 1,759,679 2,767,647 4,527,326 - 47 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 2022 is unavailable.
Source: City of San Marcos, Finance Department
Governmental Activities (1)
This page intentionally left blank.
City of San Marcos
Ratios of General Bonded Debt Outstanding
Last Ten Fiscal Years
-143-
Fiscal
Year
General
Obligation
Bonds
Revenue
Bonds (1) Total
Percent of
Assessed
Value (2) Per Capita
2013 - $ 5,144,000$ 5,144,000 $ 0.058 59 2014 - 4,901,333 4,901,333 0.053 54 2015 - 4,653,666 4,653,666 0.047 51 2016 - 4,390,999 4,390,999 0.041 47 2017 - 4,118,332 4,118,332 0.037 44 2018 (3) - - - 0.000 - 2019 - - - 0.000 - 2020 - - - 0.000 - 2021 - - - 0.000 - 2022 - - - 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
-144-
2013 2014 2015 2016
Total assessed valuation 9,300,557,724 $ 9,676,874,262 $ 10,520,993,240 $ 11,140,456,884 $ Conversion percentage 25% 25% 25% 25%
Adjusted assessed valuation 2,325,139,431 2,419,218,566 2,630,248,310 2,785,114,221 Debt limit percentage 15% 15% 15% 15%
Debt limit 348,770,915 362,882,785 394,537,247 417,767,133 Total net debt applicable to limit:
General obligation bonds - - - - Legal debt margin 348,770,915 $ 362,882,785 $ 394,537,247 $ 417,767,133 $ 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
Fiscal Year
-145-
2017 2018 2019 2020 2021 2022
11,744,932,234$ 12,494,456,100 $ 13,361,593,962 $ 14,194,801,290 $ 14,890,516,324 $ 15,433,625,698 $ 25% 25% 25% 25% 25% 25%
2,936,233,059 3,123,614,025 3,340,398,491 3,548,700,323 3,722,629,081 3,858,406,425 15% 15% 15% 15% 15% 15%
440,434,959 468,542,104 501,059,774 532,305,048 558,394,362.15 578,760,963.68 - - - - - - 440,434,959$ 468,542,104 $ 501,059,774 $ 532,305,048 $ 558,394,362 $ 578,760,964 $
0.000% 0.000% 0.000% 0.000% 0.000% 0.000%
Fiscal Year
City of San Marcos
Pledged-Revenue Coverage
Last Ten Fiscal Years
-146-
Revenue Bonds (1)
Debt Service (2)
Fiscal Year Revenue Principal Interest Coverage
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 2022 - - - 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
-147-
Estimated
Percentage Outstanding Debt
Share of
Overlapping
DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT: Applicable (2) June 30, 2022 (3) Debt Metropolitan Water District 0.433% $20,175,000 87,358 $ Palomar Community College District 10.558% 655,840,155 69,243,604 San Marcos Unified School District 62.819% 273,680,421 171,923,304 San Marcos Unified School District Community Facilities District No. 3 100.000% 350,000 350,000 San Marcos Unified School District Community Facilities District No. 4 86.152% 13,420,000 11,561,598 San Marcos Unified School District Community Facilities District No. 7 100.000% 6,795,000 6,795,000 San Marcos Unified School District Community Facilities District No. 8 100.000% 3,085,000 3,085,000 Other School Districts Various 1,242,265,908 425,001 Palomar Pomerado Hospital 11.785% 408,228,082 48,109,679 City of San Marcos 100.000% - -
City of San Marcos Community Facilities District No. 88-1 100.000% 6,861,185 6,861,185 City of San Marcos Community Facilities District No. 91-01 0.000% - - City of San Marcos Community Facilities District No. 99-01 100.000% 47,189,998 47,189,998 City of San Marcos Community Facilities District No. 2002-1 100.000% 9,925,000 9,925,000 California Statewide Communities
Development Authority
Assessment District No. 22-01 100.000% 1,490,000 1,490,000 TOTAL DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT 377,046,727 DIRECT AND OVERLAPPING GENERAL FUND DEBT:
San Diego County General Fund Obligations 2.437% $245,340,000 5,978,936 San Diego County Pension Obligation Bonds 2.437% 340,825,000 8,305,905 San Diego County Superintendent of Schools Obligations 2.437% 7,780,000 189,599 Palomar Community College District General Fund Obligations 10.558% 1,440,000 152,035 San Marcos Unified School District General Fund Obligations 62.819% 70,463,687 44,264,584 Other School District Certificates of Participation Various 113,880,000 93,349 City of San Marcos General Fund Obligations 100.000% 2,250,000 (4) 2,250,000 TOTAL DIRECT AND OVERLAPPING GENERAL FUND DEBT 61,234,408 OVERLAPPING TAX INCREMENT DEBT (Successor Agency): 100.000% 240,960,000 $ 240,960,000 TOTAL DIRECT DEBT 2,250,000
TOTAL OVERLAPPING DEBT 676,991,135
COMBINED TOTAL DEBT (3) (4) 679,241,135$
Direct Debt 0.00%
Total Direct and Overlapping Tax and Assessment Debt 2.55% Combined Direct Debt ($2,250,000) 0.02%
Combined Total Debt 4.60%
Ratios to Redevelopment Incremental Valuation ($10,056,043,322):
Total Overlapping Tax Increment Debt 2.40%
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
-148-
Fiscal
Year
Square
Miles Population
Population
Percentage
Change
Personal Income
(1)
Per Capita
Personal
Income (1)
Unemployment
Rate
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 6,995,088,374 72,637 3.20 2022 33.07 93,585 -2.82 (3) (3) 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
-149-
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 3,334 1 7.21%
California State University San Marcos 1,924 2 4.16%
Palomar Community College 1,989 3 4.30%
Wested 824 4 1.78%
Hunter Industries, Inc. 781 5 1.69% 725 1 2.51%
United Parcel Service, Inc. 551 6 1.19% 433 2 1.50%
Southern California Permanente Medical Group 454 7 0.98% 301 4 1.04% Costco Wholesale 390 8 0.84% 253 9 0.88%
The Home Depot 256 9 0.55% 148 22 0.51%
Lusardi Construction Co. 250 10 0.54% 300 5 1.04%
North County Health Project
(3) 250 11 0.54%
Wal-Mart Stores, Inc. 237 12 0.51% 350 3 1.21%
Hughes Circuits Inc. 220 13 0.48% 164 15 0.57%
Fluid Components International 217 14 0.47% 155 12 0.54% Hollandia Dairy, Inc. 215 15 0.46% 185 14 0.64%
Total 11,892 25.71% 3,014 10.45%
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. (3) Formerly the "North County Health Services"
Sources: City of San Marcos, Business License Directory City of San Marcos, Economic Development Department
California Employment Development Department.
2022 2013
This page intentionally left blank.
City of San Marcos
Full-time and Part-time Employees by Function
Last Ten Fiscal Years
-150-
Function/Program 2013 2014 2015 2016 2017 2018 2019 2020 (2) 2021 2022 General government 58 57 61 56 52 43 67 40 48 60
Community development 39 42 34 26 29 33 40 25 34 41
Public safety (1) 95 97 90 105 108 104 129 108 121 114
Highways, streets and parks 76 76 77 84 88 92 97 82 65 71 Culture and recreation 128 120 149 181 177 158 200 73 121 121 Total 396 392 411 452 454 430 533 328 389 407
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
Fiscal Year
City of San Marcos
Operating Indicators by Function (1)
Last Ten Years
-151-
Function/Program 2013 2014 2015 2016 2017
General Government:
Number of business licenses issued 5,519 5,623 5,593 5,762 5,916 Number of requests for public information 253 238 276 355 346 Number of new hires including part-time 85 90 123 182 150 Number of invoices processed 12,354 13,464 13,342 12,813 12,287 Public Safety:
Police:
Contracts with the San Diego
County Sheriff's Department for
full service law enforcement
Fire:
Number of emergency calls 7,287 7,675 8,889 10,719 11,258 Number of fire inspections 3,214 2,953 2,894 2,419 2,431 Highways and Streets:
Number of street lights added in current year 6 19 - 5 30 Number of traffic signals added in current year - 1 1 3 1 Miles of streets swept 15,165 15,175 12,090 12,090 12,090 Miles of centerline streets added 5 - - - - Storm drain structures cleaned and repaired (2) 568 597 596 602 719 Culture and Recreation (3):
Number of facility rentals 768 799 802 862 925 Number of swim program participants 46,211 52,577 57,009 40,711 38,105 Number of adult sports participants 41,660 46,313 47,094 50,814 55,809 Number of youth sports participants 20,946 22,946 23,014 26,415 27,013 Number of senior nutrition program meals served 13,455 12,775 13,039 10,813 10,997 Community Development:
Number of building permits issued 1,248 1,700 1,877 2,390 2,198 Approximate number of building inspections conducted 15,247 15,713 10,922 12,150 10,641 Number of new business licenses issued 1,316 1,342 1,462 1,519 1,407 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
Fiscal Year
-152-
2018 2019 2020 2021 2022
5,898 6,086 5,808 5,450 5,660
353 379 492 693 714
144 165 83 117 163
12,123 12,123 12,290 10,624 10,423
11,458 11,275 10,838 11,603 12,464
3,168 2,748 1,745 1,482 6,957
15 6 6 - 8
- 4 3 - -
12,157 12,157 12,354 12,354 12,219
-- - - -
1,109 282 487 448 750
931 1,052 641 107 393
33,955 21,338 11,634 3,705 1,581
59,361 64,025 59,056 1,470 6,886
32,092 33,603 21,256 4,112 6,333
12,024 11,450 11,642 12,846 9,112
2,326 2,337 2,200 2,409 2,763
16,829 11,999 9,127 10,669 14,726
1,346 1,385 1,166 1,138 1,264
Fiscal Year
City of San Marcos
Capital Asset Statistics by Function/Program
Last Ten Fiscal Years
-153-
Function/Program 2013 2014 2015 2016 2017
Public Safety:
Police (1)
Fire
Number of fire stations 4 4 4 4 4 Number of emergency vehicles 36 38 41 44 47 Highways and Streets:
Miles of streets (2) 199 197 197 197 197 Number of street lights 2,702 2,708 2,708 2,713 2,743 Culture and Recreation:
Parks (3) 34 35 35 35 36
Acres of park and trail land (3) 380 384 384 384 333 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
-154-
2018 2019 2020 2021 2022
4444 4
47 50 50 50 50
198 204 204 204 204
2,758 2,760 2,383 2,383 2,391
36 36 37 39 39
333 333 287 256 256
2222 2
Fiscal Year
This page intentionally left blank.