Santa Barbara City Council
March 14, 2023

4.11.1. Time and Pooling Time. No individual speaker may speak for more than 3 minutes. Persons who speak during public participation on an individual agenda item may pool their time with others when to do so will allow a group of speakers to consolidate and shorten their remarks. Persons who wish to pool their time shall so indicate on their Request to Speak. Each person who is donating time shall be present in the Council chambers to deliver the Request to Speak form and when the pooled-time speaker is heard. Time will be pooled up to a maximum of 5 minutes for any single speaker, regardless how many persons donate their time. A person may not donate only a portion of their time.

4.12. Public Comment.

4.12.1. At the beginning of the 2:00 p.m. session of each regular City Council meeting, the City Council shall allow any member of the public to address them on any matter of interest that is within the subject matter jurisdiction of the City. Should City Council business continue into the evening session at 6:00 p.m., the City Council shall allow any member of the public who did not address them during the 2:00 p.m. session to do so. The City Council, upon majority vote, may decline to hear a speaker on the grounds that the subject matter is not within the jurisdiction of the City.

4.12.2. Time Limits. The total amount of time for public comment shall be 30 minutes, and no individual speaker may speak for more than 3 minutes except when the speaker requires the assistance of a translator. Speakers who have submitted a “Request to Speak" form prior to the time that the item on the agenda is initially read by the Deputy City Clerk, but who cannot be heard during the initial public comment session due to the total amount of time exceeding 30 minutes, will be heard at the end of the meeting. The Mayor may set a time deadline for persons to submit “Requests to Speak” forms. The Mayor may shorten the time limit for individual speakers in a uniform, non-discriminatory manner if there are a large number of requests to speak.

4.12.3. Pooling Time. Persons who speak during the public comment portion of the agenda may not pool their time with others.

4.12.4. Council and Staff Responses. No action or discussion shall be undertaken on any item not appearing on the posted agenda, except that members of a legislative body or its staff may briefly respond to statements made or questions posed by persons exercising their public comment testimony rights.

In addition, on their own initiative or in response to questions posed by the public, a member of a legislative body or its staff may ask a question for clarification, make a brief announcement, or make a brief report on his or her own activities.

Furthermore, a member of a legislative body, or the body itself, subject to rules or procedures of the legislative body, may provide a reference to staff or other

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resources for factual information, request staff to report back to the body at a subsequent meeting concerning any matter, or take action to direct staff to place a matter of business on a future agenda.

4.13. Decorum and Rules of Conduct.

4.13.1. Duty to Preserve Decorum. While the Council is in session, all persons shall preserve order and decorum. Persons addressing the City Council, whether speaking during the public comment session or to an item on the agenda, shall address questions and comments to the City Council and not to members of the public or to staff. All persons shall address the City Council only after recognition and authorization by the Mayor. Any person disrupting the Council meeting shall be barred by the Mayor from further attendance at said meeting. Any member of the public who disrupts a meeting and fails to comply with the rules of decorum and conduct after being warned by the Mayor, thereby requiring the Mayor to interrupt the meeting once again to restore order, shall be considered to be disrupting the Council meeting and may be removed from the meeting room upon order by the Mayor if the person does not promptly cease the disruption.

4.13.2. Disruption Prohibited. No person shall engage in behavior that disrupts, disturbs, impedes, or renders infeasible the orderly conduct of the Council meeting. Prohibited disruptive behavior includes but is not limited to shouting, making disruptive noises, such as boos or hisses, engaging in behavior that constitutes the use of force or that a reasonable observer would perceive to be an actual threat to use force, creating or participating in a physical disturbance, speaking out of turn or in violation of applicable rules, preventing or attempting to prevent others who have the floor from speaking, preventing others from observing the meeting, entering into or remaining in an area of the meeting room that is not open to the public, or approaching the Council dais without consent. Individuals shall not be allowed to bring furniture into Council Chambers, or other items that might obstruct free passage within or ingress to or egress from Council Chambers, or to place any such obstructions in Council Chambers aisles or passage ways.

4.13.3. Electronic Devices. All electronic devices, such as phones, tablets or computers, shall be used in a silent mode so as not to disrupt the meeting with beeping, rings or other noises.

4.13.4. Signs. No sign shall be brought into the Council Chambers or displayed unless it can be held by one person without blocking the view of the dais by other persons seated in the Council Chambers. Signs shall not be affixed to poles or sticks. No sign or other material shall be affixed to the walls of the Council Chambers.

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4.13.5. Sergeant-at-Arms. The Chief of Police (or representative) shall act as ex-officio sergeant-at-arms of the Council. The Police Chief shall carry out all orders and instructions of the presiding officer for the purpose of maintaining order and decorum inside and outside of the Council Chambers. Persons who disrupt a Council meeting while in session are subject to arrest and prosecution.

Upon instructions of the Mayor it shall be the duty of the sergeant-at-arms or any police officer present to eject from the Council Chambers any person in the audience who disrupts the proceedings of the Council meeting.

4.14. Quasi-Judicial Hearings.

4.14.1. Overview. It is the policy of the Council to avoid and discourage substantive oral communications or individualized written communications about quasi-judicial matters, except during a noticed public hearing. Written communications distributed to a majority of the Council shall be disclosed to the City Administrator/City Clerk and made public as required by the Ralph M. Brown Act. The following procedural guidelines are intended to implement this policy, but shall not be construed to create any remedy or right of action.

4.14.2. Generally. These procedures are intended to assure that the due process rights of all persons are protected during quasi-judicial City hearings.

Quasi-judicial hearings require a higher level of procedural due process because of the potential impact on life, liberty or property. In the land use context, quasijudicial hearings typically involve a single parcel of land and apply facts and evidence in the context of existing law.

4.14.3. Applicability. Quasi-judicial hearing procedures will apply to the following City Council hearing matters:

4.14.3.1. Appeals from quasi-judicial matters, including but not limited to:

4.14.3.1.1. Actions of the Single Family Design Board

4.14.3.1.2. Actions of the Historic Landmarks Commission

4.14.3.1.3. Actions of the Architectural Board of Review

4.14.3.1.4. Actions of the Planning Commission

4.14.3.1.5. Permits issued by the Police or other departments that implicate liberty, property or life interests

4.14.3.1.6. Revocation of any permit in which the permittee has a vested property interest

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4.14.4. Identification of Quasi-Judicial Matters on the Agenda. The City Administrator/City Clerk, in conjunction with the City Attorney, will identify agenda items involving quasi-judicial decisions on the Council agenda. This identification is intended to inform the Council, interested parties, and the public that this policy will apply to the item, but failure to identify an item shall not be cause for a continuance.

4.14.5. Policy to Avoid Ex Parte Contacts. Ex parte contacts are substantive oral or individual written communications concerning quasi-judicial matters that occur outside of noticed public hearings. City Councilmembers should avoid and discourage ex parte contacts if at all possible.

4.14.6. Disclosure of Ex Parte Contacts. If an ex parte contact does occur (which it might because the public has a hard time understanding that on quasi-judicial matters the Council’s decision making is confined to the hearing), the Councilmember must disclose the contact and the substance of the information communicated on the record at the start of the public hearing. This disclosure allows people who may have a different point of view or contrary evidence to make their points during the hearing in response to the information you may have obtained through the ex parte contact. The disclosure might go something like this: “I was approached by the appellant last week and they told me that neighborhood traffic is much greater than the City’s baseline assumptions.”

4.14.7. Ex Parte Contacts After the Hearing. Ex parte contacts after a public hearing is closed and before a final decision is rendered are prohibited because there is no opportunity for rebuttal.

4.14.8. Hearings De Novo. Appeals to the Council shall be conducted de novo, meaning that new evidence and arguments may be presented and considered. All matters in the record before any other City board, commission or official shall be part of the record before the Council.

4.14.9. Burden of Proof. The applicant and appellant shall bear the burden of proof on all aspects of the action or relief they seek. The person with the burden of proof must offer evidence to the Council to support his or her position.

4.14.10. Rules of Evidence. Council hearings need not be conducted according to formal rules of evidence. Any relevant evidence may be considered if it is the sort of evidence upon which responsible persons rely in the conduct of serious affairs. The presiding officer may exclude irrelevant or redundant testimony and may make such other rulings as may be necessary for the orderly conduct of the proceedings while ensuring basic fairness and full consideration of the issues

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involved. Evidentiary objections shall be deemed waived unless made in a timely fashion before the Council.

4.14.11. Written Findings. On any matter for which state law or City ordinance requires the preparation of written findings, the staff report and other materials submitted on the matter will contain findings proposed for adoption by the Council. Any motion directly or impliedly rejecting the proposed findings must include a statement of alternative or modified findings or a direction that the matter under consideration be continued for a reasonable period of time in order for staff to prepare a new set of proposed findings consistent with the evidence whichthat has been presented and the decision whichthat is anticipated.

4.14.12. Councilmembers Who Are Absent During Part of a Hearing.

A Councilmember who is absent from any portion of a hearing conducted by the Council may vote on the matter provided that he or she has watched or listened to a video or radio broadcast, or video or audio recording, of the entire portion of the hearing from which he or she was absent and if she or he has examined all of the exhibits presented during the portion of the hearing from which he or she was absent and states for the record before voting that the Councilmember deems himself or herself to be as familiar with the record and with the evidence presented at the hearing as he or she would have been had he or she personally attended the entire hearing.

4.14.13. Council Use of Electronic Communication Devices During Meetings. The Council’s use of electronic communication devices, such as cell phones, during a quasi-judicial City Council hearing may lead to the public’s perception that a Councilmember is not paying attention to the subject matter at hand or that a Councilmember is receiving information relative to the subject matter at hand that other Councilmembers and members of the public are not receiving.

Therefore, the Council’s use of electronic communication devices (including cell phones), other than for the purpose of accessing agenda materials or conducting individual research, is prohibited during quasi-judicial City Council hearings.

4.14.14. Ex Parte Contacts by Staff Attorneys. Pursuant to Rule 3.5 of the California Rules of Professional Conduct, attorneys who represent the City, and City staff or contractors who happen to be attorneys but who are not engaged to represent the City, may:

4.14.14.1. Contact the City Council ex parte on nonsubstantive or procedural matters (such as scheduling or other legal requirements) or

4.14.14.2. When acting in a neutral, non-adversarial
capacity, communicate oral or written legal advice publicly

SANTA BARBARA CITY COUNCIL PROCEDURES
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or confidentially to the City Council as allowed by state or federal law, and as consistent with statutory fair hearing rights and constitutional due process principles.

4.14.15. Ex Parte Contacts by Outside Attorneys. Pursuant to Rule

3.5 of the California Rules of Professional Conduct, attorneys employed by persons doing business with the City may participate in ex parte contacts, should they occur, as provided in this rule. Any non-staff attorney who participates in an ex parte contact shall file written notification of such contact with the City Clerk, on a form prescribed by the City Attorney, no later than 2:00 p.m. the day of the City Council meeting at which the subject matter of the ex parte contact is considered.

The City Clerk shall provide a list of ex parte contact notifications to the Council before each meeting.

4.15. Estimated Agenda Start Times for Large Groups. The estimated time system is established to: i) minimize the amount of time that large groups would wait for City Council items; ii) recognize that estimating the duration of City Council items is imprecise and that an estimated time" should not create an unrealistic expectation that the time for taking an item is certain; and iii) avoid creating gaps in the City Council meeting flow. The estimated time system is established with the following guidelines:

4.15.1. An individual or group may request an estimated time for items with high public interest. High public interest means that a large group is planning to attend the meeting.

4.15.2. The intent of an estimated time would be to accommodate groups, not a specific individual scheduling request.

4.15.3. When an estimated time is established, the City Council item would be scheduled for the estimated time or later, e.g., 2:30 p.m. or later.

4.15.4. If multiple items are scheduled on an agenda for the same estimated time, the items would be taken in the order they appear on the agenda; for example, two items scheduled for 2:30 p.m. or later would be taken in the order they appear on the agenda.

4.15.5. Estimated time requests must be submitted to the City Administrator/City Clerk, who makes the final decision on whether to grant an estimated time request.

4.16. Council Chambers Capacity. Council chamber attendance is limited to the posted seating capacity. The City Administrator/City Clerk shall appropriately regulate entrance to the council chamber when the council chamber

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capacity is likely to be exceeded. Members of the public shall not remain standing in the seating area or aisles of the council chamber. Sitting on the floor is not permitted. The sergeant-at-arms shall enforce these procedures.

5. POWER OF CENSURE
The City Council establishes and reserves the power to censure members of the City Council who violate these procedures. The City Council may adopt supplemental procedures to govern censure proceedings upon the advice and counsel of the City Attorney.
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CITY OF SANTA BARBARA

COUNCIL AGENDA REPORT
AGENDA DATE: March 14, 2023
TO: Mayor and Councilmembers
FROM: Engineering Division, Public Works Department
SUBJECT: Amendment to Increase the On-Call Engineering Services Contract for Pueblo Water Resources, Inc. [Agreement]
RECOMMENDATION:

That Council authorize the Public Works Director to execute a First Amendment to City Professional Services Agreement No. 26,816 with Pueblo Water Resources, Inc. for oncall engineering services for the Water Resources Division and related projects in the amount of $750,000, for a total not-to-exceed expenditure authority of $1,100,000.

DISCUSSION:

Background
On September 22, 2020, Council approved a master agreement with Pueblo Water Resources, Inc. (Pueblo) to provide ongoing engineering services for the City of Santa Barbara’s (City) Water Resources Division. Pueblo was selected through a formal, publicly advertised Request for Qualifications process and is currently in a five-year term contract ending in 2025.

Current Status
Pueblo has successfully conducted engineering and groundwater well technical services work for multiple Water Resources Division projects. The contract has reached the authorized not-to-exceed limits. The contract is intended to provide ongoing engineering services through 2025; therefore, an increase in the not-to-exceed limit is necessary to provide on-call support for water supply planning, capital improvements, and groundwater operations and maintenance programs for the remainder of the contract period.

Anticipated work includes completing the City’s Aquifer Storage and Recovery pilot project at San Roque well, analyzing sustainable yield for the Foothill Basin, assisting with state permitting, and well replacement planning, including a condition assessment of the newly acquired Lincolnwood wells. The City will direct Pueblo to continue their work within the scope of services established in the contract.

Agenda Item No. 6
File Code No. 540.01
Council Agenda Report
Amendment to Increase the On-Call Engineering Services Contract for Pueblo Water Resources, Inc. [Agreement]
March 14, 2023

BUDGET/FINANCIAL INFORMATION:

With the approval of the recommended amendment, the total on-call engineering services contract expenditure authority for Pueblo will increase to $1,100,000. No funds will be encumbered until a task order is created for an agreed upon scope of work for an individual project. These on-call engineering services will be funded through Councilapproved appropriations from the Water Fund.

A copy of the amendment may be requested from the Public Works Department for public review by contacting [email protected].

ENVIRONMENTAL REVIEW
California Environmental Quality Act compliance will be determined as part of each individual task during the design process.

WATER COMMISSION RECOMMENDATION:

This item was presented to the Water Commission at its meeting on February 16, 2023, and the Commission voted 5:0:0 in support of staff’s recommendations.

PREPARED BY: Brian D’Amour, P.E., City Engineer/KB/rl
SUBMITTED BY: Clifford M. Maurer, P.E., Public Works Director APPROVED BY: City Administrator’s Office

CITY OF SANTA BARBARA

COUNCIL AGENDA REPORT
AGENDA DATE: March 14, 2023
TO: Mayor and Councilmembers
FROM: Engineering Division, Public Works Department
SUBJECT: Amendment to Design Contract with The Cearnal Collective for the Santa Barbara Police Station Project to Include Certified Access Specialist Services [Agreement]
RECOMMENDATION:

That Council authorize the Public Works Director to execute a First Amendment to the City Professional Services Contract Number 28,167 with The Cearnal Collective for an increase in design services in the amount of $12,633 for Certified Access Specialist services related to the Santa Barbara Police Station Project, for a total not-to-exceed dollar amount of $4,576,744.

DISCUSSION:

Background
In July 2022, Council approved Professional Services Agreement Project Contract Number 28,167 with The Cearnal Collective (Cearnal) for Phase 4 of architectural and design services for the Santa Barbara Police Station Project (Project) which included Design Development Drawings, Construction Drawings, Bidding and Negotiation, and Architectural Design Services during construction. Cearnal was given a Notice to Proceed for Phase 4.1, Design Development. This scope of work did not include a Certified Access Specialist (CASp) at the time. However, it was understood that a CASp professional would be added through an amendment when the time was appropriate.

Increased Services
The identified CASp, Camarillo CASp Services, will review the plans for the Project for physical access compliance in the Design Development and Construction Document phases and will provide written comments that will be incorporated into the final permit document set.

Agenda Item No. 7
File Code No. 700.08
Council Agenda Report
Amendment to Design Contract with The Cearnal Collective for the Santa Barbara Police Station Project to Include Certified Access Specialist Services [Agreement] March 14, 2023

BUDGET/FINANCIAL INFORMATION:

Staff recommends that Council authorize the Public Works Director to execute the First Amendment to Contract Number 28,167 with Cearnal in the amount of $12,633 for CASp services that will include a 12.5% subconsultant markup and a 10% design contingency, consistent with terms in the contract, for a total not-to-exceed dollar amount of $4,576,743. Camarillo CASp Services is well qualified to perform this work.

There are sufficient expenditure appropriations in the Police Station Project in the Measure C Capital Fund in Fiscal Year 2023 to cover the cost of this amendment.

A copy of the amendment may be requested from the Public Works Department for public review by contacting [email protected].

PREPARED BY: Brian D’Amour, P.E., City Engineer/BH/sk
SUBMITTED BY: Clifford M. Maurer, P.E., Public Works Director APPROVED BY: City Administrator’s Office

CITY OF SANTA BARBARA

COUNCIL AGENDA REPORT
AGENDA DATE: March 14, 2023
TO: Mayor and Councilmembers
FROM: Engineering Division, Public Works Department
SUBJECT: Amendment to the Memorandum of Understanding with the Santa Barbara County Association of Governments for the Milpas Street at U.S. Highway 101 Operational Improvements Project [Agreement] RECOMMENDATION:

That Council authorize the City Administrator to execute the First Amendment to the Memorandum of Understanding, Agreement 26,901, between the City of Santa Barbara and the Santa Barbara County Association of Governments, to extend the term end date to June 30, 2024 for the completion of the design, environmental, and right-of-way phases of the Milpas Street at U.S. Highway 101 Operational Improvements Project.

DISCUSSION:

Background and Project Description
The adopted 2017 Environmental Impact Report for the US Highway 101 Widening Project (HOV Project), which is managed by the California Department of Transportation, identified traffic operational impacts and required capacity improvements on Milpas Street between the U.S. Highway 101 southbound on- and off-ramps. Moreover, alterations to traffic patterns on Milpas Street between the U.S. Highway 101 underpass and Hutash Street are critical to the success and safe operation of the HOV Project.

The Milpas Street at U.S. Highway 101 Operational Improvements Project (Project) addresses the traffic operational impacts by:
 Widening Milpas Street at the northeast corner of the intersection of Milpas Street and Hutash Street;
 Modifying the lane layout and restriping of the Milpas Street and Hutash Street intersection to add a dedicated turn lane onto Hutash Street (this movement is currently shared with southbound left turns onto the freeway). This will allow U.S.

Highway 101 on- and off-ramp traffic to move concurrently;  Traffic signal modifications at the Milpas Street and Hutash Street intersection; and Agenda Item No. 8
File Code No. 150.03
Council Agenda Report
Amendment to the Memorandum of Understanding with the Santa Barbara County Association of Governments for the Milpas Street at U.S. Highway 101 Operational Improvements Project [Agreement]
March 14, 2023

 Extending the existing median south of the U.S. Highway 101 underpass to the intersection of Milpas Street and Cacique Street to prohibit left turns from southbound Milpas Street to eastbound Cacique Street. This will help prevent southbound off-ramp traffic from queueing back up to the US-101 southbound mainline. Eastbound Cacique Street will have access from northbound Milpas Street via the hook ramp.

BUDGET/FINANCIAL INFORMATION:

The Santa Barbara County Association of Governments is the Project’s sponsor and has dedicated funding to design and construct the Project. The executed Memorandum of Understanding (MOU), Agreement 26,901, dated March 22, 2021, includes funding for the design and right-of-way phases only, for a total not-to-exceed amount of $395,000.

The City of Santa Barbara (City) and the Santa Barbara County Association of Governments need to extend the term end date to June 30, 2024. It is anticipated that the MOU will be amended again to include construction costs once the design is complete.

Project Schedule
The City will continue the work outlined in the amended MOU with the following tentative schedule:

Tentative Project Schedule
Begin Project Design April 2021
Complete Final Design and Right-of-Way May 2023
Award Construction Contract Summer 2023
Begin Construction Fall 2023
Complete Construction Early 2024
The recommended MOU amendment will extend the term end date to June 30, 2024, which will account for the Project’s close-out phase.

A copy of the amendment is available for public review from the Public Works Department by submitting a request via email to [email protected].

COMMUNITY OUTREACH:

Project outreach is planned for adjacent businesses and property owners in early March 2023, with continued outreach anticipated once the project is about to begin construction.

Council Agenda Report
Amendment to the Memorandum of Understanding with the Santa Barbara County Association of Governments for the Milpas Street at U.S. Highway 101 Operational Improvements Project [Agreement]
March 14, 2023

ENVIRONMENTAL REVIEW:

The Project requires environmental review per the California Environmental Quality Act.

ATTACHMENT: Project Location Map
PREPARED BY: Brian D’Amour, P.E., City Engineer/ANF/sk
SUBMITTED BY: Clifford M. Maurer, P.E., Public Works Director APPROVED BY: City Administrator’s Office
This service has been provided to allow a visual display of City information. Every effort has been made to ensure the accuracy of the map and data. The City of Santa Barbara assumes no responsibility arising from the use of this information. THE MAPS AND ASSOCIATED DATA ARE PROVIDED WITHOUT A WARRANTY OF ANY KIND. This map was created using the City of Santa Barbara Mapping Analysis and Printing System application. 2,496 © City of Santa Barbara 416.017 Legend 1: WGS_1984_Web_Mercator_Auxiliary_Sphere0 208.009 416.017 Feet Notes Enter Map Description MAP DISCLAIMER Reported on 03/22/2021 10:35 AM City Limits Assessor's Parcels - City World Street Map

CITY OF SANTA BARBARA

COUNCIL AGENDA REPORT
AGENDA DATE: March 14, 2023
TO: Mayor and Councilmembers
FROM: Business and Properties, Airport
SUBJECT: Parking Management Agreement with Republic Parking Systems LLC and Parking Access Revenue Control Systems Replacement with TIBA, LLC [Agreement]
RECOMMENDATION:

That Council find it in the City’s best interest to waive the formal bid procedure as authorized by Municipal Code Section 4.52.070(L), and authorize the Airport Director to execute a three-year professional parking management agreement, with two one-year options, with Republic Parking Systems LLC, for $39,690 annually over the three-year term, with incremental increases if the Airport exercises the additional options, for parking management services, and leasing, installation and maintenance of the parking access revenue control software and equipment (PARCS) at the Airport’s short and long-term parking lots.

DISCUSSION:

Background
The Airport Department operates three parking lots with a total of approximately 1,450 parking stalls. The Short-Term Lot and Long Term Lot 1, both adjacent to the Airline Terminal, are staffed 24 hours per day and 365 days per year. The third parking lot, Long Term Lot 2, serves as a remote, overflow parking lot for the Airline Terminal and employees.

Parking Management Agreement
The Airport has contracted with an outside service company for the management of its three parking lots for well over two decades. The agreement is in the form of a management contract, whereby the Airport reimburses the firm for all operational costs and also pays a monthly management fee for administration and profit. This model has proven to be an economical option and allows the Airport staff to focus on their primary mission of operating the airport facility.

Agenda Item No. 9
File Code No. 550.08
Council Agenda Report
Parking Management Agreement with Republic Parking Systems LLC and Parking Access Revenue Control Systems Replacement with TIBA, LLC [Agreement] March 14, 2023

The Airport's existing contract with Republic Parking, LLC, (Republic) is set to expire on March 31, 2023. Republic is part of six leading parking brands that came together to form the largest parking operator in North America—REEF. Republic currently manages and operates the Airport's three customer parking lots, shuttle service and other parking services as required. Due to the excellent service provided by Republic, even during the most difficult staffing challenges faced after COVID-19 lockdowns, and the exclusive partnership solution they offer to more efficiently address the Airport's current parking equipment and software challenges in a more cost efficient way, it is in the Airport's best interests to enter into this new contract.

Parking Equipment Replacement
REEF has a partnership with TIBA, LLC, a leading manufacturer and supplier of parking access and revenue control systems (PARCS). Together, the companies have completed over 100 projects and have established a strong and reliable partnership. REEF is offering an equipment leasing agreement through the proposed parking management agreement that allows the City to obtain new PARCS equipment and software that is manufactured and supplied by TIBA, LLC. The total cost of the leased equipment is $622,796, including a monthly service fee, and will be amortized over the term of the contract and paid to REEF in monthly payments. This exclusive leasing agreement is only available through a parking management contract with REEF. This includes all necessary equipment for the new system in all three airport parking lots, as well as the revenue control software. Additionally, as part of the operating costs of the agreement, the City will be responsible for an one-time payment of $37,840 for the civil work to install the equipment. Installation is tentatively scheduled for after March 2023.

TIBA, LLC's PARCS include advanced technologies such as touch screen, HID proximity reader, QR barcode scanner, Bluetooth reader, pinhole camera, and voice annunciation.

The system also features rear license plate recognition, online reservation capabilities, and cloud-based servers to eliminate technical issues. TIBA, LLC is the fastest-growing PARCS company in North America, with more installations across all verticals than any other competitor. The company has local offices in Brea and El Segundo and eight factory-trained technicians based in Southern California.

In comparison, the current Skidata parking access revenue control systems (PARCS) installed in 2017 require major server and software system upgrades. Skidata's proposed cost for these upgrades, civil work, installation, training, and added annual service agreements exceeded the total five-year cost proposed by the agreement with TIBA, LLC.

Skidata has had difficulty in remedying recent software and aging equipment issues, and it is likely that increasing frequency of costly equipment and software updates will be needed within the next five years.

For these reasons, along with the close partnership REEF has with TIBA, LLC, staff recommends that the City waive the formal bidding procedure and authorize the City to enter into an agreement for professional parking management services with REEF that will include the installation, lease, and maintenance of PARCS equipment and software supplied by Council Agenda Report
Parking Management Agreement with Republic Parking Systems LLC and Parking Access Revenue Control Systems Replacement with TIBA, LLC [Agreement] March 14, 2023

TIBA, LLC. This is in the best interest of the City as it offers a cost-effective and more streamlined solution with advanced technology and a reliable partnership.

A copy of the agreement may be requested from the Airport Department for public review; please contact [email protected] to request a copy.

BUDGET/FINANCIAL INFORMATION:

The FY 2023 Airport Operating budget has adequate expenditure appropriation to cover the additional monthly costs in this recommendation.

PREPARED BY: Jonathan Abad, Airport Business Manager
SUBMITTED BY: Christopher Hastert, Airport Director
APPROVED BY: City Administrator's Office

CITY OF SANTA BARBARA

COUNCIL AGENDA REPORT
AGENDA DATE: March 14, 2023
TO: Mayor and Councilmembers
FROM: Accounting Division, Finance Department
SUBJECT: Annual Comprehensive Financial Report for the Fiscal Year Ended June 30, 2022.

RECOMMENDATION:

That Council accept the Annual Comprehensive Financial Report (ACFR) for Fiscal Year (FY) ended June 30, 2022.

DISCUSSION:

Pursuant to City Charter, Finance Department staff have prepared the City’s annual financial statements for the fiscal year ended June 30, 2022. Each year, financial statements are prepared to report on the financial condition of the City as a whole, as well as individual funds/operations that are included within the City’s operations.

While only certain financial statements and schedules are required by state law and the City Charter, other information and elements are needed to be considered for an award for excellence in financial reporting from the Government Finance Officers Association (GFOA), which recognizes the highest standards of financial reporting. GFOA awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Santa Barbara California for its ACFR for the fiscal year ended June 30, 2021. This was the thirty-fourth year that the City has received this prestigious award. To be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized ACFR. This report must satisfy both Generally Accepted Accounting Principles (GAAP) and applicable legal requirements.

A Certificate of Achievement is valid for a period of one year. Staff believe that the current ACFR for the fiscal year ended June 30, 2022, continues to meet the Certificate of Achievement Program’s requirements and are submitting it to GFOA to determine its eligibility for another certificate. The City remains committed to financial transparency and compliance through the rigor and completeness of information presented to City Council and the public through the ACFR.

Agenda Item No. 10
File Code No. 210.01
Council Agenda Report
Annual Comprehensive Financial Report for the Fiscal Year Ended June 30, 2022 March 14, 2023

The expanded financial statements and other information included in the report are collectively referred to as ACFR. In addition to allowing the ACFR to be considered for the GFOA award for financial reporting, the financial statements are expanded to enable the community and other interested parties to obtain a better and more complete understanding of the City’s finances and operations.

The financial statements were audited by the independent public accounting firm of CliftonLarsonAllen LLP (CLA), whose unmodified opinion is included within the financial section of the report. An unmodified opinion indicates that the financial statements present fairly the financial position of the City of Santa Barbara as of June 30, 2022, and the results of operations, in accordance with generally accepted accounting principles.

As part of the audit, CLA also reviewed and performed tests of the City’s internal accounting control procedures to determine if there are any material weaknesses or instances of non-compliance.

The ACFR is divided into three major sections: the introductory section, the financial section, and the statistical section. The introductory section includes a letter of transmittal, a directory of City officials, and an organizational chart. The financial section includes the independent auditors’ report (as noted above), management’s discussion and analysis (MD&A), and the financial statements, including notes. The statistical section includes financial trend information as well as demographic information about the City. The format of the ACFR is designed to serve the needs of the following primary users: the City Council and other governmental oversight bodies, the public, and agencies assessing the City’s creditworthiness. This Council Agenda Report includes the statement of net position, statement of activities, and other information to assist in understanding the ACFR. The MD&A and supplemental schedules and notes provide additional information.

The table below summarizes the assets, liabilities, and resulting net position for governmental and business-type activities for the fiscal year ending June 30, 2022.

Governmental funds include activities that occur in the General Fund primarily, along with certain special revenue funds while business-type funds include the City’s various enterprise funds, such as water and wastewater, among others.

Council Agenda Report
Annual Comprehensive Financial Report for the Fiscal Year Ended June 30, 2022 March 14, 2023

Governmental
Activities
Business-Type
Activities
Total
Current and other assets $267,948,022 $254,573,426 $522,521,448 Capital assets, net 520,184,996 578,651,681 1,098,836,677 Total Assets $788,133,018 $833,225,107 $1,621,358,125
Deferred Outflows of Resources 59,477,934 9,601,412 69,079,346 Current liabilities $56,702,127 $36,589,230 $93,291,357 Net Pension Liability 204,551,666 33,714,468 238,266,134 Other Non-current liabilities 70,342,698 169,653,496 239,996,194 Total Liabilities $331,596,491 $239,957,194 $571,553,685 Deferred Inflows of Resources 108,638,263 55,722,945 164,361,208 Net investment in capital assets $518,120,325 $398,278,166 $916,398,491 Restricted 105,463,587 5,662,805 111,126,392
Unrestricted -216,207,714 143,205,409 -73,002,305
Total Net Position $407,376,198 $547,146,380 $954,522,578 Net Position
Liabilities
Assets
“Net position” is defined as the excess of all the City’s assets and deferred outflows, if any, over all its liabilities and deferred inflows, if any, regardless of fund. The City’s net position for fund grouped under governmental and business-type activities remain strong at $407.4 Million and $547.1 Million, respectively. The net position for governmental activities grew by $45.1 Million in FY2022 compared to FY2021, while the net position in business-type activities grew by $40.5 Million.

The table below summarizes the expenses and revenues for the major functions and programs in the Governmental Activities.

Governmental Functions /
Programs
Expenses Revenue Net
Administration $ 19,176,420 $ 12,366,378 $ (6,810,042)
Public Safety 90,004,343 9,451,928 (80,552,415)
Public Works 37,767,154 30,932,013 (6,835,141)
Community Services 24,966,519 8,724,231 (16,242,288)
Community Development 15,484,695 15,593,349 108,654
Sustainability and Resilience 109,765 0 (109,765)
Total Governmental Activities $ 187,508,896 $ 77,067,899 ($110,440,997) Council Agenda Report
Annual Comprehensive Financial Report for the Fiscal Year Ended June 30, 2022 March 14, 2023

Many of these functions/programs are funded through General Fund tax revenues, such as sales, property, and transient occupancy taxes. The revenues summarized in this table are revenues directly generated from specific functions and programs within the departments.

The table below summarizes the expenses and revenues for the major enterprise functions and programs in the business-type activities.

Functions/Programs Expenses Revenue Net
Water $ 50,912,908 $ 81,039,695 $ 30,126,787
Wastewater 22,307,034 25,806,729 3,499,695
Airport 27,529,554 32,083,093 4,553,539
Waterfront 14,387,354 17,278,283 2,890,929
Solid Waste 30,333,012 34,316,963 3,983,951
Downtown Parking 9,172,583 6,082,120 (3,090,463)
Golf 3,401,465 4,228,617 827,152
Clean Energy 16,021,442 14,718,475 (1,302,967)
Total Business-type Activities $ 174,065,352 $215,553,975 $41,488,623 The enterprise functions are entirely self-sustaining and generate their own revenue to cover both operating and capital expenditures. The Water and Airport Enterprises realized $30.1 Million and $4.5 Million of net revenues, respectively, that will be programmed to implement priority capital projects in the coming years. The Downtown Parking program experienced challenges related to reduced business, retail, parking, and other economic activities because of COVID; however, retail and other downtown activities returned slightly in FY2022 when comparing FY2021.

Annual pension expenses have been and are projected to continue to rise and represent a significant amount of the City’s operating budget. The pension funded status remains around 68%, which is typical for many municipalities throughout the State. On December 6, 2022, City Council took decisive action to address future pension-related costs and liabilities by appropriating 12.5%, or $1.6 Million, of the FY2022 year-end savings in the General Fund to establish a Section 115 Trust to allocate additional resources to address the growing and volatile pension liabilities. Staff will plan to introduce the Section 115 Trust, along with a pension management policy, to the City Council late in FY2023 for review and approval.

Staff will present the ACFR to the Finance Committee just prior to the Council’s afternoon session. A representative from CLA will be present to provide the Finance Committee with a summary of the audit and the results thereof.

Council Agenda Report
Annual Comprehensive Financial Report for the Fiscal Year Ended June 30, 2022 March 14, 2023

BUDGET/FINANCIAL INFORMATION:

The acceptance of the City’s ACFR has no direct fiscal impact on the City; however, the reports are necessary to allow for City Council oversight of the financial condition of the City. Failing to prepare and accept such reports could jeopardize the City’s credit rating and its ability to obtain grants and debt financing in the future.

The ACFR for the Fiscal Year Ended June 30, 2022, is available for review in the City Clerk’s Office. An electronic version of the ACFR will be available on the City’s website at www.SantaBarbaraCA.gov/Budget-Reports.

ATTACHMENT: Annual Comprehensive Financial Report
PREPARED BY: Doug Smith, Accounting Manager
SUBMITTED BY: Keith DeMartini, Finance Director
APPROVED BY: City Administrator's Office

ATTACHMENT
This Page Left Intentionally Blank

CITY OF SANTA BARBARA, CALIFORNIA

ANNUAL COMPREHENSIVE FINANCIAL REPORT
FISCAL YEAR ENDED JUNE 30, 2022
Prepared Under the Supervision of
Keith DeMartini, Finance Director

CITY OF SANTA BARBARA

TABLE OF CONTENTS
FISCAL YEAR ENDED JUNE 30, 2022

INTRODUCTORY SECTION
TRANSMITTAL LETTER 1

GOVERNMENT FINANCE OFFICERS ASSOCIATION CERTIFICATE OF
ACHIEVEMENT FOR EXCELLENCE IN FINANCIAL REPORTING 6
DIRECTORY OF CITY OFFICIALS 7
ADVISORY BOARDS AND COMMISSIONS 8
ORGANIZATIONAL CHART 9

FINANCIAL SECTION
INDEPENDENT AUDITORS’ REPORT 11
MANAGEMENT’S DISCUSSION AND ANALYSIS 16

BASIC FINANCIAL STATEMENTS

GOVERNMENT-WIDE FINANCIAL STATEMENTS
STATEMENT OF NET POSITION 35
STATEMENT OF ACTIVITIES 36

FUND FINANCIAL STATEMENTS

GOVERNMENTAL FUNDS
BALANCE SHEET 38

RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL
FUNDS TO THE NET POSITION OF GOVERNMENTAL ACTIVITIES 39

STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN
FUND BALANCES – GOVERNMENTAL FUNDS 40

RECONCILIATION OF THE STATEMENT OF REVENUES,

EXPENDITURES, AND CHANGES IN FUND BALANCES OF
GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES 41

PROPRIETARY FUNDS
STATEMENT OF NET POSITION 42

STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND
NET POSITION 44

CITY OF SANTA BARBARA

TABLE OF CONTENTS
FISCAL YEAR ENDED JUNE 30, 2022
STATEMENT OF CASH FLOWS 46

FIDUCIARY FUNDS
STATEMENT OF FIDUCIARY NET POSITION 50
STATEMENT OF CHANGES IN FIDUCIARY NET POSITION 51
NOTES TO BASIC FINANCIAL STATEMENTS 53

REQUIRED SUPPLEMENTARY INFORMATION

SCHEDULE OF CHANGES IN THE TOTAL PENSION LIABILITY AND
RELATED RATIOS – SAFETY RETIREMENT AND SAFETY SERVICE
RETIREMENT PLANS 119
SCHEDULE OF CONTRIBUTIONS – SAFETY RETIREMENT AND SAFETY SERVICE RETIREMENT PLAN 121
SCHEDULE OF INVESTMENT RETURNS – SAFETY RETIREMENT AND
SAFETY SERVICE RETIREMENT PLANS 124

SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND
RELATED RATIOS 125
SCHEDULE OF CONTRIBUTIONS – CALPERS MISCELLANEOUS
PENSION PLANS 127

SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND
RELATED RATIOS – CALPERS SAFETY POLICE PENSION PLANS 129 SCHEDULE OF CONTRIBUTIONS – CALPERS SAFETY POLICE PENSION PLANS 131
SCHEDULE OF CITY’S PROPORTIONATE SHARE OF THE PLAN’S NET

PENSION LIABILITY AND RELATED RATIOS AS OF THE
MEASUREMENT DATE – SAFETY FIRE - COST SHARING PLAN 133
SCHEDULE OF CONTRIBUTIONS – CALPERS SAFETY FIRE PENSION PLANS 135

SCHEDULE OF CHANGES IN TOTAL OPEB LIABILITY AND RELATED RATIOS 137

BUDGETARY COMPARISON SCHEDULES
GENERAL FUND 138
AFFORDABLE HOUSING SPECIAL REVENUE FUND 139

CITY OF SANTA BARBARA

TABLE OF CONTENTS
FISCAL YEAR ENDED JUNE 30, 2022
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION 140

NONMAJOR GOVERNMENTAL FUNDS
DESCRIPTION OF NONMAJOR GOVERNMENTAL FUNDS 149

OTHER SPECIAL REVENUE FUNDS
COMBINING BALANCE SHEET 152

COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES 156

SCHEDULES OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE – BUDGET AND ACTUAL
TRAFFIC SAFETY SPECIAL REVENUE FUND 160
CREEK RESTORATION/WATER QUALITY SPECIAL REVENUE FUND 161 WILDLAND FIRE SUPPRESSION 162
TRANSPORTATION DEVELOPMENT 163
COMMUNITY DEVELOPMENT BLOCK GRANT 164
POLICE – ASSET FORFEITURE SPECIAL REVENUE FUND 165
COUNTY LIBRARY SPECIAL REVENUE FUND 166
MEASURE A SPECIAL REVENUE FUND 167
MISCELLANEOUS GRANTS SPECIAL REVENUE FUND 168
STREET SWEEPING SPECIAL REVENUE FUND 169
HOME PROGRAM SPECIAL REVENUE FUND 170
POLICE – SUPPLEMENTAL LAW ENFORCEMENT SPECIAL REVENUE
FUND 171
STREETS SPECIAL REVENUE FUND 172
POLICE CAD-RMS SUPPORT SPECIAL REVENUE FUND 173

NONMAJOR PROPRIETARY FUNDS
DESCRIPTION OF NONMAJOR PROPRIETARY FUNDS 177

NONMAJOR ENTERPRISE FUNDS

CITY OF SANTA BARBARA

TABLE OF CONTENTS
FISCAL YEAR ENDED JUNE 30, 2022
COMBINING STATEMENT OF NET POSITION 178

COMBINING STATEMENT OF REVENUES, EXPENSES, AND
CHANGES IN NET POSITION 179
COMBINING STATEMENT OF CASH FLOWS 180

INTERNAL SERVICE FUNDS
DESCRIPTION OF INTERNAL SERVICE FUNDS 185

INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF NET POSITION 186

COMBINING STATEMENT OF REVENUES, EXPENSES, AND
CHANGES IN NET POSITION 187
COMBINING STATEMENT OF CASH FLOWS 188

FIDUCIARY FUNDS
DESCRIPTION OF FIDUCIARY FUNDS 193

FIDUCIARY FUNDS
COMBINING STATEMENT OF FIDUCIARY NET POSITION 194

COMBINING STATEMENT OF CHANGES IN FIDUCIARY NET
POSITION 195

STATISTICAL SECTION (UNAUDITED)
STATISTICAL TABLE OF CONTENTS 199
NET POSITION BY COMPONENT – LAST TEN FISCAL YEARS 201
CHANGES IN NET POSITION BY COMPONENT – LAST TEN FISCAL
YEARS 202
GOVERNMENTAL ACTIVITIES TAX REVENUES BY SOURCE – LAST TEN FISCAL YEARS 204
FUND BALANCES OF GOVERNMENTAL FUNDS – LAST TEN FISCAL
YEARS 205
CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS – LAST
TEN YEARS 206

ASSESSED VALUE AND ESTIMATED ACTUAL VALUE OF TAXABLE
PROPERTY – LAST TEN FISCAL YEARS 208

CITY OF SANTA BARBARA

TABLE OF CONTENTS
FISCAL YEAR ENDED JUNE 30, 2022
DIRECT AND OVERLAPPING PROPERTY TAX RATES – LAST TEN
FISCAL YEARS 209
PRINCIPAL PROPERTY TAXPAYERS – CURRENT YEAR AND TEN
YEARS AGO 210
PROPERTY TAX LEVIES AND COLLECTIONS – :LAST TEN FISCAL
YEARS 211
RATIOS OF OUTSTANDING DEBT BY TYPE – LAST TEN FISCAL YEARS 212 RATIOS OF GENERAL BONDED DEBT OUTSTANDING – LAST TEN
FISCAL YEARS 213
LEGAL DEBT MARGIN INFORMATION 214
PLEDGED-REVENUE COVERAGE – LAST TEN FISCAL YEARS 215
DEMOGRAPHIC ECONOMIC STATISTICS – LAST TEN FISCAL YEARS 218 PRINCIPAL EMPLOYERS – CURRENT YEAR AND NINE YEARS AGO 219 CITY GOVERNMENT EMPLOYEES BY FUNCTION – LAST TEN FISCAL YEARS 220
OPERATING INDICATORS BY FUNCTION – LAST TEN FISCAL YEARS 221 CAPITAL ASSET STATISTICS BY FUNCTION – LAST TEN FISCAL YEARS 222

COMPLIANCE AND INTERNAL CONTROL SECTION
INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER

FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER

MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS

PERFORMED IN ACCORDANCE WITH
225

INTRODUCTORY SECTION
(1)
March 1, 2023
Honorable Mayor, Members of the City Council, and Residents of the City of Santa Barbara
It is our pleasure to submit the Annual Comprehensive Financial Report (ACFR) of the City of Santa Barbara for the fiscal year ended June 30, 2022, in accordance with Section 1219 of the City Charter. The report was prepared by the City’s Finance Department and responsibility for the accuracy of the data, the completeness and fairness of the presentation, and all disclosures, rests with the City. To the best of our knowledge and belief, the information in the ACFR is accurate in all material respects and is reported in a manner designed to present fairly the financial position and results of operations of the City.

This report consists of management’s representations concerning the City finances. To provide a reasonable basis for making these representations, management established a comprehensive internal control framework designed both to protect the City’s assets from loss, theft, or misuse, and to compile sufficient reliable information for the preparation of the City’s financial statements in conformity with Generally Accepted Accounting Principles (GAAP).

The City Charter requires an annual audit of the City’s financial statements by an independent certified public accountant. CliftonLarsonAllen LLP, the City’s audit firm, has issued an unmodified opinion on the City’s financial statements for the fiscal year ended June 30, 2022.

The independent auditors’ report is located on pages 9-11 within the financial section of this report. The ACFR has been prepared using the financial reporting requirements as prescribed by Government Accounting Standards Board (GASB) Statement No. 34. GASB 34 requires that management provide a narrative introduction, overview, and analysis to accompany the financial statements in the form of a Management’s Discussion and Analysis (MD&A). This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. The MD&A can be found beginning on page 13.

PROFILE OF THE CITY OF SANTA BARBARA
The City of Santa Barbara is located between the Santa Ynez Mountains and the Pacific Ocean. Santa Barbara offers year-round sunshine, miles of beaches, a colorful history dating back to the Chumash Indian tribes, a rich Spanish heritage, gourmet dining, and spectacular parks. It is often referred to as the American Riviera. The City was incorporated in August of 1850 and today serves a local population of 88,255. The City is a major employment center and tourist destination.

The City provides a wide range of services to its citizens. These services include police and fire protection; construction and maintenance of highways, streets, traffic signals and infrastructure; community development; recreational activities and cultural events; parks; parking facilities; water; wastewater; library; airport; harbor; and a golf course, among many other services.
(2)

LOCAL ECONOMY
As far back as the late 1800’s, the City of Santa Barbara was a place people from across the country came to enjoy its natural beauty, including its wonderful beaches, great year-round weather, and many recreational and cultural offerings. This is still true today, such that tourism is the largest industry in the City.

The national, state, and local economies have been enjoying one of the longest, most robust periods of stability and growth in many years leading into 2020. Many economic sectors experienced significantly reduced activity beginning in March of 2020, due to shutdowns in response to the COVID-19 pandemic. Locally in Santa Barbara and the surrounding region, immediate impacts included school and business closures, the temporary closure of many public buildings and places of congregation, a sharp increase in unemployment rates, and the immediate retooling of how public services can be provided in a virtual world.

Leisure/hospitality and retail industries were impacted immediately and significantly by the pandemic. Both industries provide a substantial portion of General Fund revenues to the City of Santa Barbara through transient occupancy and sales taxes, among other tax and revenue sources. The City has prioritized the gradual replenishment and building of General Fund reserves over the past 10 years following the Great Recession because of the City Council’s strong commitment to fiscal sustainability. Through the use of these reserves, along with achieving expenditure savings, among other budget balancing strategies, the City has and will continue to operate within its means to continue to deliver services to Santa Barbara residents and visitors.

Local economic trends have shown strong growth in transient occupancy and sales tax revenues, particularly during the Spring and Summer months of 2022 compared to drastic decline in activity the years prior. Both transient occupancy and sales taxes have reached record levels in FY2022. The real estate market has remained relatively strong since the pandemic with property taxes continuing to grow at a strong and steady rate.

In May of 2021, the City received its first tranche of American Rescue Plan Act (ARPA) federal relief funds. The City Council took decisive action to accept those funds and allocate them to partially offset the revenue lost in the City’s General Fund since the pandemic began to continue to sustain ongoing General Funded operations, such as police, fire, parks and recreation and library services. In May of 2022, the City received its second tranche of ARPA funds which the City Council appropriated for a variety of priority projects and initiatives, including park and recreation facility renovations, homeless and mental health services, and library digital materials, among many other initiatives.

The General Fund reserves have largely been replenished in FY2022 and are meeting the target contingency and disaster reserve targets set by the City Council. Through continuing to control costs, implementing strong financial controls, and realizing additional transient occupancy and sales tax revenues due to strong economic activity late in FY2022, the City achieved this important goal of replenishing reserves. The uses of reserves have been a tool that the City has utilized in prior years immediately following local natural disasters, such as the Thomas Fire and COVID. Continuing to prioritize the replenishment of these reserves allows the City to persevere through operational and financial hardship in the future.

The local economy is likely to continue to face many challenges in the coming year given continued economic and operating uncertainty. The City will continue to respond and support local businesses with their operational challenges.
(3)

LONG-TERM FINANCIAL PLANNING
Long-term financial planning is an integral part of the City’s fiscal management and is even more critical now given the current and projected economic uncertainty. Each of the City’s operating funds, including the General Fund and its enterprise funds, maintains a long-term financial model. For enterprise funds, which are largely funded from rates and charges for direct services provided, the financial models go out as far as ten years. These operations are relatively stable financially and, as such, lend themselves to a longer-term view, which in turn helps inform real time decisions of how to manage rates and charges to ensure operating costs are covered; and equally important is ensuring funds will be available for their capital needs.

A long-term financial model is also maintained for the General Fund. The model looks forward five years, rather than ten, because of the volatile nature of tax revenues in a tourist-based economy make it very difficult to predict revenues with any certainty beyond five years.

Nonetheless, the financial model is invaluable in the development of the biannual financial plan and annual operating budget. The financial model has recently been enhanced to incorporate recession and more aggressive economic scenarios to understand the potential, additional impact on General Fund reserves. These models will continue to be refined over the coming months leading into the upcoming FY2024 and FY2025 operating budgets to articulate fiscally pragmatic assumptions for revenues.

As an additional planning tool, the City adopts a two-year financial plan, with the first year representing the adopted annual budget and the second year serving as a financial plan and a starting point for the following year. Two-year financial plans take more time to produce in the first year, but it forces the organization and staff to take a longer-term view of its operations at a more detailed level than a financial model that they might not otherwise do. Even though the City’s Charter requires an annual budget, the City has embraced the concept and additional discipline required to incorporate a second year into its budget/planning document.

Annual pension expenses have been and are projected to continue to rise and represent a significant amount of the City’s operating budget. The pension funded status remains around 68%, which is typical for many municipalities throughout the State. On December 6, 2022, the City Council took decisive action to address future pension-related costs and liabilities to appropriate 12.5%, or $1.6 Million, of the FY2022 year-end savings in the General Fund to establishing a Section 115 Trust to allocate additional resources to address the growing and volatile pension liabilities. Staff will plan to introduce the Section 115 Trust, along with a pension management policy, to the City Council late in FY2023 for review and approval.

The City is self-insured and funds its own workers’ compensation claims as well as coverage for liability and property. The Self-Insurance Fund (SIF) purchases several types of insurance to cap exposure to large or catastrophic loss. Property insurance has become increasingly expensive to purchase due to continued drought and wildfire conditions throughout California, and liability insurance has also become more expensive due to high claim costs associated with losses, such as law enforcement claims. The City Council has supported staff’s recommendations to increase funding into the SIF in FY2022 and in years to come to ensure that the SIF has adequate funding and reserves to achieve adequate coverage for city facilities and operations.

FINANCIAL CONTROLS
The City's management is responsible for establishing and maintaining a system of internal controls designed to ensure that the City's assets are protected from loss, theft or misuse. The City’s system of internal controls must also ensure that adequate accounting data is compiled (4)
to allow for the preparation of financial statements in conformity with GAAP. The City's system of internal controls is designed to provide reasonable, but not absolute, assurance that these objectives are met. The concept of reasonable assurance recognizes that: (1) the cost of a control should not exceed the benefits likely to be derived; and (2) the valuation of costs and benefits requires estimates and judgments by management. We believe that the City's system of internal controls adequately safeguards assets and provides reasonable assurance as to the proper recording of financial transactions. The City's internal controls are subject to periodic evaluation by the City's management.

Single Audit
As a recipient of federal assistance, the City is responsible for maintaining a system of internal controls that will ensure compliance with applicable laws and regulations related to those federal programs. As part of the City’s federal single audit, tests are made to determine the adequacy of the internal controls, including that portion relating to federal financial assistance.

The single audit also seeks to determine whether the City has complied with, in all material respects, all applicable laws and regulations that could have a direct or material effect on a major grant program. The single audit did not encounter any instances of material weaknesses in the City’s internal controls over financial reporting.

Budgetary Controls
The City maintains budgetary controls designed to ensure compliance with the legal provisions contained in the annual budget approved by the City Council. The level of budgetary control (the level at which expenditures cannot legally exceed the appropriated amount) is at the department level for the General Fund and at the fund level for all other legally adopted budgets.

The City maintains a formal, integrated encumbrance accounting system as one means of ensuring budgetary control. Purchase orders that would result in an overrun of department appropriations at a major object category level are not released until additional funds have been appropriated. Appropriations for encumbrances outstanding at year-end are carried over and re-appropriated in the following fiscal year.

OTHER INFORMATION
Spending Limitation
Article XIIIB of the California Constitution, also known as the Gann spending limit, restricts the amount of “proceeds of taxes” California governments may spend. As of June 30, 2022, the City had not reached its Article XIIIB spending limitation.

AWARDS AND ACKNOWLEDGEMENTS
The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Santa Barbara California for its ACFR for the fiscal year ended June 30, 2021. This was the thirty-fourth year that the City has received this prestigious award. To be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized ACFR. This report must satisfy both Generally Accepted Accounting Principles (GAAP) and applicable legal requirements.

A Certificate of Achievement is valid for a period of one year only. Staff believe that the current ACFR for the fiscal year ended June 30, 2022, continues to meet the Certificate of Achievement
(5)
Program’s requirements and are submitting it to GFOA to determine its eligibility for another certificate.

The preparation of this ACFR could not have been accomplished without the hard work and team effort of the Finance Department, in particular Doug Smith, Accounting Manager, Jessica Yates, Accounting Supervisor, Jo Salamack and Takero Shinoda, Senior Accountants, and Sarolyn Boyd, Accountant II, all of whom put in tremendous hours in the preparation of this report. Staff appreciate the City Council’s direction and policy oversight on the various fiscal and budget issues addressed during the year. In addition, Department Directors and staff at all levels should be acknowledged for their continued attention to planning and conducting the City financial and procurement operations in a responsible and progressive manner.

Respectfully submitted,
(6)
(7)
(8)

CITY OF SANTA BARBARA
Advisory Boards and Commissions
Charter Boards and Commissions Membership
Airport Commission ................................................................................................. 7 Architectural Board of Review.................................................................................. 7 Civil Service Commission ........................................................................................ 5 Fire and Police Commission .................................................................................... 5 Harbor Commission ................................................................................................. 7 Historic Landmarks Commission ............................................................................. 9 Library Board ........................................................................................................... 5 Parks and Recreation Commission .......................................................................... 7 Planning Commission .............................................................................................. 7 Water Commission................................................................................................... 5 Committees and Commissions
Access Advisory Committee .................................................................................... 7 Arts Advisory Committee ......................................................................................... 7 Building and Fire Code Board of Appeals ................................................................ 7 Central Coast Commission for Senior Citizens ........................................................ 1 Citizens’ Oversight Committee ................................................................................. 7 Community Development and Human Services Committee .................................. 13 Community Events and Festivals Committee .......................................................... 7 County of Santa Barbara Library Advisory Committee ............................................ 1 Creeks Advisory Committee .................................................................................... 7 Downtown Parking Committee................................................................................. 7 Housing Authority Commission ................................................................................ 7 Living Wage Advisory Committee ............................................................................ 7 Measure P Committee ............................................................................................. 7 Metropolitan Transit District Board ........................................................................... 2 Mosquito and Vector Management District Board ................................................... 1 Neighborhood Advisory Council ............................................................................. 13 Rental Housing Mediation Board ........................................................................... 15 Santa Barbara Youth Council ................................................................................ 15 Sign Committee ....................................................................................................... 3 Single Family Design Board ..................................................................................... 7 Sister Cities Board ................................................................................................... 3 Transportation and Circulation Committee .............................................................. 7 Other Advisory Bodies
Arts and Crafts Show Advisory Committee .............................................................. 8 Golf Advisory Committee ......................................................................................... 7 Integrated Pest Management Advisory Committee ................................................. 5 Staff Hearing Officer ................................................................................................ 1 Oversight Board ....................................................................................................... 1 Street Tree Advisory Committee .............................................................................. 5 (9)
(10)

FINANCIAL SECTION
CLA (CliftonLarsonAllen LLP) is an independent network member of CLA Global. See CLAglobal.com/disclaimer.

CliftonLarsonAllen LLP
CLAconnect.com
(11)
INDEPENDENT AUDITORS’ REPORT
The Honorable City Council
of the City of Santa Barbara
Santa Barbara, California
Report on the Audit of the Financial Statements
Opinions
We have audited the accompanying financial statements of the governmental activities, the businesstype activities, each major fund, and the aggregate remaining fund information of the City of Santa Barbara, (the City) as of and for the year ended June 30, 2022, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents.

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Santa Barbara, as of June 30, 2022, and the respective changes in financial position, and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (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 Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Emphasis of Matter
Change in Accounting Principle
As described in Note 1 to the financial statements, effective July 1, 2021, the City adopted new accounting guidance, Statement of Governmental Accounting Standards Board (GASB Statement) No. 87, Leases. Our opinions are not modified with respect to this matter.

Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of 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.

The Honorable City Council
of the City of Santa Barbara
(12)
In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for 12 months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.

Auditors’ Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with GAAS and Government Auditing Standards, we:

Exercise professional judgment and maintain professional skepticism throughout the audit.

Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, no such opinion is expressed.

Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.

Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit.

The Honorable City Council
of the City of Santa Barbara
(13)
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the Management’s Discussion and Analysis, Budgetary Comparison Schedules – General and Major Special Revenue Funds, modified approach for City streets infrastructure capital assets, the schedules of changes in net pension liability and related ratios, the schedules of plan contributions, the schedule of investment returns – safety retirement and safety service retirement plans, and the schedules of changes in the total other postemployment benefit (OPEB) liability and related ratios be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with GAAS, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The combining financial statements and individual fund budgetary schedules are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with GAAS. In our opinion, the combining financial statements and individual fund budgetary schedules are fairly stated, in all material respects, in relation to the basic financial statements as a whole.

Other Information
Management is responsible for the other information included in the annual report. The other information comprises the introductory and statistical sections but does not include the basic financial statements and our auditors’ report thereon. Our opinions on the basic financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon.

In connection with our audit of the basic financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the basic financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report.

The Honorable City Council
of the City of Santa Barbara
(14)
Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated March 1, 2023, on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance.

CliftonLarsonAllen LLP
Irvine, California
March 1, 2023
(15)
(16)
MANAGEMENT’S DISCUSSION AND ANALYSIS
Fiscal Year Ended June 30, 2022
This section of the City’s Annual Comprehensive Financial Report presents an overview of the City’s financial activities for the fiscal year ended June 30, 2022. We encourage readers to consider the information presented here in conjunction with additional information that we have included in our letter of transmittal, which can be found on pages 1-4 of this report.

FINANCIAL HIGHLIGHTS
Financial highlights include the following:

At the end of fiscal year 2022, the City’s net position (assets and deferred outflows minus liabilities and deferred inflows) totaled $955.0 million, an increase of approximately $85.6 million from the prior year.

Unrestricted funds may be used by the City to meet ongoing operations, subject to applicable federal and state laws and regulations. Of the total net position, unrestricted funds had a deficit balance of $(73) million, due to the implementation of GASB 68. Business Type activities increased by $40.5 million, and Governmental activities increased by $45.1 million.

As of June 30, 2022, the City’s governmental funds reported combined ending fund balances of $179.0 million, an increase of $29.1 million (19.4%) from the prior year.

OVERVIEW OF FINANCIAL STATEMENTS
The City’s basic financial statements are comprised of three components: (1) Government-wide Financial Statements, (2) Fund Financial Statements, and (3) Notes to the Basic Financial Statements.

Each of these components is discussed below.

Government-wide Financial Statements
The Government-wide Financial Statements are designed to present financial information about the City as a whole in a manner similar to the private sector, including the use of accrual-based accounting to recognize its revenues and expenses. Governmental activities, which are normally supported by taxes and intergovernmental revenues, are reported separately from business-type activities. Businesstype activities rely primarily on user fees and charges to fund their operations. Governmental activities include those traditionally associated with local government, such as public safety (fire and police), community development, public works, library, parks and recreation, and general government (administrative) functions. Business-type activities include the City’s utility operations (water, wastewater and solid waste), the City’s municipal airport, the waterfront/harbor, downtown parking, golf course, and clean energy.

The Statement of Net Position presents all City assets, including capital assets, and deferred outflows, all related current liabilities, deferred inflows and long-term debt obligations. The difference between total assets and deferred outflows and total liabilities and deferred inflows is presented as “Net Position,” which serves as a measure of the financial health of the City. Over time, increases or decreases in net position are indicators of an improving or deteriorating City financial condition.

The Statement of Activities provides the details of how the City’s net position changed during the fiscal year. Decreases in net position are presented as “Expenses”; increases in net position are presented as “Revenues”. Revenues directly attributable to a particular function or program within the City are presented as “Program Revenues”. Tax revenues, including those restricted to a (17)
particular program function, are reported as “General Revenues” unless specifically required to be reported as program revenues (i.e., gas and transportation taxes).

Fund Financial Statements
The City, like other state and local governments, uses fund accounting for recording its financial activities. In general, fund accounting provides a mechanism to separately account for a variety of different funding sources and thereby enables the City to demonstrate compliance with legal or contractual requirements that may be associated with these funds. Accordingly, the accompanying fund financial statements present individual funds, organized into one of three groups based on the nature of the activities and their purpose: Governmental, Proprietary, or Fiduciary Funds. Note that the fund financial statements only present information on the most significant (i.e., “major”) funds on the face of the statement. Non-major funds are grouped and presented in total on the face of the statements. In addition, the fund financial statements include a schedule that reconciles the fund financial statements to the government-wide financial statements previously described. This is designed to explain the differences created by the integrated approach.

Governmental Funds – Most of the City’s basic services are reported in governmental funds.

Governmental funds include the General Fund, Special Revenue, Capital Projects, and Debt Service funds. In the fund financial statements, all governmental fund types are reported using the modified accrual basis of accounting. This is a departure from the basis of accounting used in the private sector and is used in the public sector in recognition of the different purpose and focus of financial reporting.

Under the modified accrual basis of accounting, revenues are generally recognized when measurable and available to finance current operating costs, rather than when earned; and expenditures are recognized when the related liability is incurred. Because the focus is only on inflow (revenue) and outflow (expenditures) of current financial resources, the balance sheets of governmental funds present only short-term assets and liabilities.

The fund financial statements include separate columns, by fund type, for all major governmental funds of the City. All non-major governmental funds are consolidated into a single column labeled “Other Governmental Funds.” The details of these funds are included in the Combining and Individual Fund Statements and Schedules located in the Financial Section of this report.

Proprietary Funds – Proprietary funds are used to account for services provided to external customers or other City departments and funds that are primarily funded from user fees and charges. Proprietary funds use the accrual basis of accounting and measure the balance and change in total economic resources. This basis of accounting and financial reporting is consistent with the private sector in recognition that the purpose and focus of enterprise funds, while not on generating a profit, necessitate the measurement of the full cost of providing services for rate setting purposes. Accordingly, balance sheets of proprietary funds include all assets and liabilities, including long-term receivables, capital assets, and long-term liabilities. The basis of accounting and measurement focus used to prepare proprietary fund statements is the same that is used to prepare the government-wide statements. Thus, the proprietary fund statements provide the same, but more detailed, information about these funds, which are included in the “Business-Type Activity” column of the government-wide statements.

Proprietary funds include enterprise funds and internal service funds. The City uses enterprise funds to account for its water, wastewater, solid waste, airport, waterfront/harbor operations, downtown parking, golf, and clean energy. Internal service funds are used to account for intra-city services such as fleet maintenance and replacement, building maintenance, custodial, communications, information systems, self-insurance programs, and energy management.
(18)
Fiduciary Funds – Fiduciary funds are used to account for resources held by the City as trustee on behalf of other agencies or individuals. Fiduciary funds are not presented in the government-wide statements, as their resources are not available to support the operations of the City.

Notes to the Basic Financial Statements
The notes to the financial statements provide information that is essential to a full understanding of the data provided in the Government-wide and Fund Financial Statements.

Other Information
In addition to the basic financial statements and related notes, this report also presents certain required supplementary information concerning the City’s progress in funding its obligation to provide pension benefits and other post-employment benefits to its employees; budgetary comparison schedules for the General Fund and each major special revenue fund; and schedules and disclosures of the modified approach for reporting the City’s infrastructure.
(19)

GOVERNMENT-WIDE FINANCIAL ANALYSIS
The City has presented its financial statements under the reporting model required by Governmental Accounting Standards Board Statement No. 34 (GASB 34). The following analysis of the GovernmentWide statements includes a comparison between current and prior year results of operations and yearend balances.

Statement of Net Position
Table 1 below summarizes the Statement of Net Position for Governmental and Business Type Activities as of June 30, 2022, with comparative totals as of June 30, 2021. As previously stated, net position at year end serves as a useful indicator over time of whether the City’s financial position is improving or deteriorating.
2022 2021 2022 2021 2022 2021
Assets:

Current and other Assets 267,948 $ 225,933 $ 254,573 $ 187,286 $ 522,521 $ 413,219 $ Capital Assets, Net 520,185 501,835 578,652 580,122 1,098,837 1,081,957 Total Assets 727,768 788,133 833,225 767,408 1,621,358 1,495,176 Deferred Outflows of Resources: 59,478 57,339 9,601 9,884 69,079 67,223 Liabilities:

Current and other Liabilities 56,702 50,493 36,589 30,546 93,291 81,039 Noncurrent liabilities 274,894 368,754 203,368 239,768 478,262 608,523 Total Liabilities 419,248 331,596 239,957 270,314 571,554 689,562 Deferred Inflows of Resources: 108,638 3,534 55,723 345 164,361 3,879 Net Position:

Net investment in capital assets 518,120 498,799 398,278 391,224 916,398 890,023 Restricted 105,464 97,387 5,663 5,662 111,126 103,049
Unrestricted (216,208) (233,861) 143,205 109,747 (73,002) (124,114) Total Net Position $ 362,325 407,376 $ 547,146 $ 506,634 $ 954,523 $ 868,958 $ Governmental Activities Business-Type Activities Total
Table 1
Statement of Net Position
As of June 30, 2022 and 2021
in (000's)
As shown in Table 1, at June 30, 2022 the City’s net position totaled $954.5 million. The largest portion consists of the City’s net investment in capital assets in the amount of $916.4 million. This amount represents the total funds invested to acquire capital assets, reduced by the outstanding debt issued and any accounts receivable in connection with their construction, acquisition or payment. Capital assets of the City are not available, spendable resources, and generally are not liquidated to repay debt. A portion of the City’s net position, $111.1 million, is subject to restrictions imposed by external parties, and its use is determined by those restrictions and contractual agreements.

The City of Santa Barbara implemented GASB Statement 68 effective Fiscal Year ending June 30, 2015. With the reporting change, the City recognized a net pension asset, deferred outflows of resources, deferred inflows of resources, pension expense and a net pension liability. As a result of this change, unrestricted funds resulted in a deficit of $73.0 million. Unrestricted funds may be used by the City to meet ongoing operations, subject to applicable federal and state laws and regulations. Before adjusting for GASB Statement 68, unrestricted funds were $165.3 million (20)
Decisions regarding the allocations are made by the administrators of the pension plan, CalPERS, not by the City of Santa Barbara's management.

Statement of Activities
As discussed earlier, the Statement of Net Position provides a measure of the financial health of an entity at a specific date in time (i.e. year-end). In contrast, the Statement of Activities provides details of how the City’s net position changed from the prior year. Generally, it indicates whether the financial health of the City as a whole is better or worse at June 30, 2022, in relation to a year earlier. For the fiscal year ended June 30, 2022, total net position increased by $85.6 million, or 9.8%.

Table 2 summarizes the Statement of Activities for Governmental Activities and Business-Type Activities for the fiscal year ended June 30, 2022, with comparative totals for the fiscal year ended June 30, 2021.
2022 2021 2022 2021 2022 2021
Revenues:

Program Revenues:

Charges for Services 32,020 $ 25,234 $ 197,349 $ 163,697 $ 229,369 $ 188,931 $ Operating Grants and Contributions 33,100 22,360 17,913 8,742 40,272 41,842 Capital Grants and Contributions 22,688 21,274 292 3,565 22,980 24,839 General Revenues:

Taxes 154,817 128,721 - - 154,817 128,721
Franchise Fees 4,176 3,852 - - 4,176 3,852
Motor Vehicle License Fees 108 69 - - 108 69
Investment Income (1,661) 2,478 (3,858) 419 (5,518) 2,898 Other Revenue 745 90 189 189 934 279
Total Revenues 214,818 235,254 211,885 176,613 447,139 391,430 Expenses:

Program Expenses:

Administration 19,176 19,964 - - 19,176 19,964
Public Safety 90,004 88,435 - - 90,004 88,435
Public Works 37,767 46,786 - - 37,767 46,786
Community Services 24,967 27,392 - - 24,967 27,392
Community Development 15,485 19,434 - - 15,485 19,434
Sustainability and Resilience 110 38 - - 110 38
Business Activities:

Water - - 50,913 52,502 50,913 52,502
Wastewater - - 22,307 23,906 22,307 23,906
Airport - - 27,530 26,066 27,530 26,066
Waterfront - - 14,387 15,418 14,387 15,418
Solid Waste - - 30,333 31,245 30,333 31,245
Downtown Parking - - 9,173 9,138 9,173 9,138
Golf Course - - 3,401 3,446 3,401 3,446
Clean Energy - - 16,021 132 16,021 132
Total Expenses 187,509 202,050 174,065 161,853 361,574 363,904 Increase in Net Positions Before Transfers 47,745 12,767 37,820 14,759 85,564 27,526 Transfers In (Out) (2,693) 625 2,693 (625) - -
Increase (Decrease) in Net Position 45,052 13,393 40,513 14,134 85,564 27,526 Net Position, beginning of fiscal year 362,325 345,013 506,634 492,500 868,958 837,513 Restatement Prior Year (Note 18) - 3,919 - - - 3,919
Net Position, end of fiscal year 407,376 $ 362,325 $ 547,146 $ 506,634 $ 954,523 $ 868,958 $ Table 2
Statement of Activities
As of June 30, 2022 and 2021
in (000's)
Governmental Activities Business-Type Activities Total
(21)
Governmental Activities
Revenue Highlights
Total revenues for governmental activities grew 9.5% compared to fiscal year ended June 30, 2021 at $235.3 million. The largest component of total revenue is taxes at $154.8 million, making up 65.8% of total revenue in the governmental funds. This is an increase of $26.1 million when compared to Fiscal Year 2021, and is due to the rebound of economic activities following the pandemic. Receiving the majority of governmental revenue through general taxation is consistent with the nature and purpose of governmental funds, particularly in the General Fund, where programs are largely supported by general taxes. The largest tax revenues received by Governmental activities in Fiscal Year 2022 include, Sales and Use $59.3 million ($49.8 million in FY2021), Property $42.2 million ($39.9 million), Transient Occupancy $32.0 million ($18.8 million), Utility Users taxes $15.6 million ($14.7 million), Business Licenses $2.7 million ($2.5 million), and Cannabis $1.7 million ($1.9 million).

Some of the key changes in revenues are:

Sales and Use taxes reported an increase of $9.6 million from the prior year, or an 19.2% increase at $59.3 million. Fiscal Year 2020 sales tax revenues saw a decline due to the impact of COVID-19 following health directed stay at home orders and a severe global reduction in travel and tourism. Restaurants and non-essential retail outlets were closed, and many local businesses were still recovering to pre-COVID economic activities. Late in Fiscal Year 2021, restaurant, retail, and automobile sales activities saw growth that continued through Fiscal Year 2022. Online retail sales remained strong year over year as consumers’ purchasing patterns changed during the pandemic
(22)
Property taxes reported an increase of $2.4 million from the prior year, or a 5.9% increase to $42.2 million. Property taxes were not significantly impacted by COVID-19 health orders, as they are calculated on property values and transactions that tend to be lagging behind some of the consumer taxes that were instantly affected. Santa Barbara continues to be a very desirable location to live, and property prices and number of sales have remained strong even during recent economic uncertainty.

Transient Occupancy taxes (TOT) was the most significantly impacted general tax because of the restrictions on travel and social gatherings during Fiscal Year 2020 and 2021. TOT revenues remained much lower than pre-COVID levels but increased significantly in Fiscal Year 2022. In the Spring and Summer of 2021, air travel and hotel occupancy returned to pre-COVID levels, and average daily rates for hotels late in Fiscal Year 2021 and into 2022 were the highest they’ve ever been.

Other non-tax revenues reported an increase of $1.0 million in Fiscal Year 2022 for a total of $21.3 million.
(23)
Expense Highlights
Functional expenses for the year totaled approximately $187.5 million ($202.1 million in Fiscal Year 2021), a decrease of $14.5 million from the prior year. The decrease is primarily due to lower program expenses in Public Works and Community Development Departments.

The City uses CalPERS actuarial reports to calculate pension liabilities which included updated and adjusted assumptions regarding the rate of return for investments as well as other assumptions that impact the calculation of pension liability and expenses. Note 9 contains more information as to the retirement commitments of the City.

The largest component of total expenses was for Public Safety (fire and police), representing $90.0 million (48%) of the total. A large portion of public safety costs are funded from general revenues, primarily taxes. In contrast, Public Works expenses, which total $37.8 million, are funded largely from restricted revenues, including a ½ cent sales tax (Measure A), gas tax, utility user’s taxes, and federal and state grants. These resources pay for street maintenance and improvements, street sweeping, transportation planning, and other related costs.
(24)
Business-Type Activities
The City’s business-type activities net position increased by $40.5 million in Fiscal Year 2022 to $547.2 million ($506.6 million as of June 30, 2021.)
The chart below illustrates Expenses and Program Revenues for each business-type activity.

Revenue Highlights
Program revenues of $215.6 million were generated in Fiscal Year 2022, an increase of $39.5 million compared to prior year of $176.0 million (22.5% increase). Charges for services, the largest category of revenue increased by 21% across all business-type. Water and Clean Energy were the largest growth contributors.

The Water and Wastewater funds reported $15.4 million (23.4%) and $1.3 million (5.4%) more revenue at $69.1 million and $25.8 million respectively, compared to prior year because of rate increases in Fiscal Year 2022, and reductions in water conservation following improvements in the City’s water supply and lifting of the most severe drought restrictions.

Downtown Parking revenues declined significantly because of COVID-19 stay-at-home orders that reduced demand for hourly, daily and monthly parking in downtown Santa Barbara. Revenues increased in Fiscal Year 2022 compared to 2021 ending the year $1.7 million (39.7%) higher than Fiscal Year 2021 at $6.1 million. Clean Energy Fund began in Fiscal Year 2021 and ramped up to normal, annual operations and reported revenues of $14.7 million in Fiscal Year 2022.

Total operating and capital grant revenue received was $18.2 million in Fiscal Year 2022 primarily attributable to the Water Department receiving grant funding to support the Desalination project, a new water supply agreement with the Montecito Water District and the Airport receiving Federal relief funds. (25)
Expense Highlights
Expenses of the Business-Type Activities for the Fiscal Year ended June 30, 2022, totaled $174.1 million ($161.9 million as of June 30, 2021), a $12.2 million increase from the prior year.

The Water Fund expended $50.9 million, $1.6 million less than Fiscal Year 2021. Fiscal Year 2020 experienced reduced operating costs within the desalination and recycled water plants from significant rainfall in prior years. More normal operational expenditures occurred during Fiscal Year 2021 and 2022.

Airport Fund expenses were $1.5 million higher than fiscal year 2021 at $27.5 million. Business at the airport is recovering, with record passenger counts occurring; from 58,000 in January 2022 to a new record of 114,000 in June 2022.

Clean Energy Fund began in Fiscal Year 2021 and ramped up to normal, annual operations in Fiscal Year 2022 and reported expenses of $16 million. This reflects most of the increase seen over the prior year ($15.9 million more than Fiscal Year 2021). Other business type activities had increases in salary and benefit savings that helped offset this variance.
(26)

FINANCIAL ANALYSIS OF INDIVIDUAL FUNDS
The City uses fund accounting to demonstrate compliance with legal and contractual requirements.

This section provides an analysis and discussion of individual funds and fund types presented in the financial statements.

Governmental Funds
As of June 30, 2022, assets in the City’s governmental funds totaled $240.3 million ($197.2 million as of June 30, 2021). Of this total, $110.8 million ($78.1 million in prior year) consisted of cash and investments, an increase of $32.7 million over prior year. An additional $79.0 million ($78.5 million) represents outstanding loans receivable, which relate primarily to the City’s Affordable Housing Fund and Community Development Block Grant and HOME Programs. The General Fund has $2.5 million ($1.0 million) in advances (loans) to other City funds which include the Clean Energy Fund, Golf Fund, and the Energy Management Fund.

Fund balances of governmental funds totaled $179 million at June 30, 2022 ($149.8 million in the prior year), an increase of $29.1 million. An amount corresponding to prepaid assets, outstanding loans and advances receivable of $7.1 million is reported as “Non-spendable” due to the long-term nature of the assets and, therefore, unavailable to fund current operations. A further $98.4 million ($95.8 million in the prior year) is restricted for specific programs, projects, and capital improvements with $67.9 million ($67.5 million) of this restricted for affordable housing and contributing to the increase in the year. The spendable portion of fund balance totals $73.5 million, which includes committed, assigned and unassigned balances.

The General Fund’s fund balance increased by $12.8 million, 33.1%, to $51.6 million. Through strong fiscal discipline by achieving operating expenditure reductions, budget revenues conservatively and minimizing the use of reserves, the General Fund balance grew in Fiscal Year 2022 compared to the prior year. The most significant committed portion of fund balance is $39.1 million ($35.6 million in Fiscal Year 2021) consisting of funds set aside, pursuant to City policy, for natural disasters and unexpected events such as significant economic downturns that have a significant impact on the General Fund. The policy requires all operating funds, including the General Fund, to set aside an amount equal to 25% of its operating budget. The unassigned fund balance in the General Fund is $2.9 Million, an increase of $2.4 Million from Fiscal Year 2021 reported as negative $0.5 million.

Proprietary Funds
Unlike governmental funds, proprietary funds use the accrual basis of accounting for financial statement purposes. Accordingly, information reported for the individual fund statements is very similar to that presented as Business-Type Activities in the government-wide statements. Government-wide reporting requires the inclusion of activities of the City’s internal service funds related to proprietary fund activities in the Business-Type Activities. Therefore, the following analysis is very similar to that presented for Business-Type Activities.

The net position of proprietary funds consist of amounts for net investment in capital assets, amounts restricted for capital projects and debt service, as well as unrestricted amounts. Net position totaled $547.1 million as of June 30, 2022 ($506.6 million as of June 30, 2021), which increased $40.5 million, 8% from the prior year.
(27)

GENERAL FUND FINANCIAL AND BUDGETARY HIGHLIGHTS
The General Fund is the main operating fund of the City. Its revenues are primarily derived from taxes, charges for services and intra-governmental charges, which are used to pay for the traditional services provided by local government - public safety, library, parks and recreation, community development (building and planning), and public works.

Actual
Amounts
Variance
from Budget
Original Final 2022
Revenues:

Taxes 122,718 $ 128,554 $ 141,665 $ 13,111 $
Franchise Fees 3,707 3,707 $ 4,176 469
Intergovernmental 1,571 13,703 8,151 (5,552)
Charges for Services 24,892 25,332 25,916 583
Use of Money and Property 898 898 (2,248) (3,146)
Fines and Forfeitures 2,862 2,862 2,335 (527)
Other Revenues 10,276 10,354 12,057 1,703
Subtotal Revenues 166,923 185,409 192,052 6,642
Lease Obligation - - 1,179 1,179
Transfers In 1,684 1,815 1,815 -
Total other Financing Sources / (Uses) 1,815 1,684 1,815 - Total Revenues 168,607 $ 187,225 $ 193,867 $ 6,642 $
Budgeted Amounts
Table 3
Summary of General Fund Revenues
Fiscal Year Ended June 30, 2022
Budget and Actual - in (000's)
Revenues
The amended Fiscal Year 2022 General Fund revenue budget of $187.2 million reflects adjustments of $18.6 million that were approved by the City Council during the year. The most significant amendments included an increase to interdepartmental revenues to account for American Rescue Plan Act (ARPA) federal grant funding to assist with the economic impacts of COVID-19.

As shown on Table 3, actual revenues totaled $193.9 million. Tax revenues ended the year higher than the amended budget by $13.1 million, reflecting the beginning of the economic recovery from additional sales and transient occupancy tax revenues. The City Council took decisive action late in Fiscal Year 2021 to appropriate the first tranche of the American Rescue Plan Act (ARPA) funds into the General Fund to partially offset the lost revenue as a direct result of COVID. The action ensured that vital city services, including police, fire, parks and recreation and library services, continued and stabilized the budget leading into Fiscal Year 2022.
(28)
Expenditures
The amended Fiscal Year 2022 General Fund expenditure budget reflects amendments approved by the City Council during the year. The amended budget also reflects appropriations carried over from the prior year related to outstanding encumbrances as of June 30, 2021.

Actual
Amounts
Variance from
Budget
Original Final 2022
Expenditures:

Mayor and Council 3,591 $ 3,613 $ 3,469 $ 144 $
City Attorney 4,664 4,003 5,075 (410)
City Administration 4,251 4,263 5,222 959
Human Resources 1,840 1,937 3,000 1,063
Finance 6,333 6,154 6,688 535
Public Safety 80,777 77,150 79,737 1,040
Public Works 9,767 9,039 10,599 1,561
Community Services 24,429 23,840 25,842 2,002
Community Development 11,270 12,676 12,102 (574)
Sustainability and Resilience 156 110 248 138
Debt: Principal Retirement - 334 - (334)
Debt: Interest & Fiscal Charges - 84 - (84)
Subtotal Expenditures 142,791 152,755 146,717 6,038
Transfers Out (40,501) (26,702) (35,495) (5,006)
Total Expenditures 116,089 $ 112,254 $ 111,222 $ 1,032 $ Table 4
Summary of General Fund Expenditures
Fiscal Year Ended June 30, 2022
Budget and Actual - in (000's)
Budgeted Amounts
As shown on Table 4 above, actual expenditures totaled $111.2 million, and were under final budget by approximately $1.0 million. The largest savings against budget are the result of salary and benefit savings due to vacancies in budgeted positions during the year. (29)

CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets
Table 5 summarizes the City’s capital assets by class and by type of activity. It is important to note that capital assets are reported at historical cost, net of accumulated depreciation. These amounts do not represent the market value or replacement cost of City assets, which would be significantly higher.

Historical cost is used, pursuant to accounting standards, to provide an objective basis for reporting capital assets.

Governmental
Activities
Business-Type
Activities Totals
Non-Depreciating Assets
Construction in Progress 27,485 $ 22,699 $ 50,184 $
Art and Historical Treasure 1,759 - 1,759
Land 51,160 24,944 76,105
Streets 160,101 - 160,101
Depreciating Assets
Buildings 9,413 84,126 93,539
Building Improvements 42,288 7,623 49,911
Other Improvements 51,653 181,580 233,233
Equipment 11,163 12,491 23,654
Infrastructure 163,227 160,786 324,012
Right to Use Assets 1,935 161 2,097
Underground Piping - 84,242 84,242
Total Capital Assets 520,185 $ 578,652 $ 1,098,837 $
Table 5
Summary of Capital Assets
Fiscal Year Ended June 30, 2022
Net of Accumulated Depreciation - in (000's)
The City owns approximately $1,098.8 million of capital assets net of depreciation and accounts receivable, an increase of $15.9 million compared to the year ended June 30, 2021 ($1,082.0 million).

These capital assets require ongoing maintenance, improvement, and renovation. As a result, the City as a whole undertakes millions of dollars in capital improvement and construction projects each year.

The capital improvement projects undertaken in the Governmental Activities category typically include improvements to the City’s infrastructure (roads, curbs, storm drains, bridges, sidewalks, gutters, etc.) and improvements to City public facilities, such as parks, restrooms, community facilities, and playgrounds. Starting in 2004, governmental funds have been required to capitalize and report the costs of acquiring or constructing infrastructure assets acquired or constructed after 1982. Where information was readily available, or if a value could be reasonably estimated, the City capitalized infrastructure assets acquired or constructed prior to 1982.

With regard to capital improvements to City streets, which is also considered “infrastructure,” the City has elected to use the “modified approach” pursuant to Governmental Accounting Standards (30)
Board (GASB) Statement No. 34 in accounting for streets. As such, these assets have been reported separately from other infrastructures in Table 5. The City has established a pavement condition assessment process whereby approximately one-third of the entire street system is assessed on a rotating basis every two years. Each road segment is rated and given a pavement condition index (PCI) value from zero to one hundred (0-100), where PCI scores of 51-70 are considered to be in “At Risk” condition, and roads with PCI scores of 71-100 are considered to be in “Excellent/Good” condition. The City has a minimum target PCI of 60, whereby the modified approach may be applied, with an aspiration to improve the PCI to 70 in the coming years whereby ongoing maintenance needs are considered to be most cost effective. Pursuant to the modified approach, depreciation is not reported for this subsystem and all costs, except for betterments and major improvements made to the subsystem, are expensed rather than capitalized. The most recent biennial report was for the period ended June 30, 2022, and the average PCI for City streets exceeded the minimum policy level of 60 with a reported average score of 63, defined as “At Risk.” Governmental Activities which include Internal Service Funds have construction in progress projects totaling $27.5 million which have commenced or continued in fiscal year 2022 including: De La Vina Bridge project ($4.2 million); Cabrillo bridge replacement ($3.7 million); W. Carrillo light and signal upgrade ($3.1 million); other streets, bike lane, pedestrian and sidewalk related improvements ($4.4 million); new police station ($1.9 million); general infrastructure and public facilities improvements ($5.5 million); and fleet replacement ($4.7 million).

For Business-Type Activities, construction in progress projects totaling $22.7 million which have commenced or continued in Fiscal Year 2022 primarily relate to facilities used in connection with enterprise funds, including water, wastewater, airport, waterfront, golf and downtown parking. These operations can be much more capital intensive given the nature of the services they provide. The City’s business-type funds included a net decrease of $1.5 million in capital assets. Construction in progress increased by a net of $14.2 million from Fiscal Year 2021. Capital projects completed in the year included: Water infrastructure improvements ($15.9 million); general airport improvements ($1.8 million); wastewater improvements ($4.7 million); public parking improvements ($0.14 million); and waterfront improvements ($0.2 million). Additional information on the City of Santa Barbara’s capital assets can be found in Notes 1 and 5 to the financial statements, and Required Supplementary Information of this report.

Long-Term Debt
Table 6 below summarizes outstanding long-term debt related to the issuance of bonds, certificates of participation, and loans; the table excludes outstanding claims payable, deferred debt costs, and compensated absences. As shown in the table, the City had approximately $170.1 million ($182.5 million in the prior year) in outstanding long-term debt at June 30, 2022, a net decrease of $12.4 million from the prior year. It is important to note that the Governmental Activities, which primarily consists of the General Fund, has no long-term indebtedness, which is a good financial indicator. (31)
Governmental
Activities
BusinessType
Activities Totals
Revenue Bonds - $ 38,215 $ 38,215 $
Certificates of Participation - 9,095 9,095
Loans - 122,785 122,785
Total Debt - $ 170,096 $ 170,096 $
Table 6
Summary of Outstanding Issued Debt
Fiscal Year Ended June 30, 2022
in (000's)
Revenue Bonds
The City has a total of $38.2 million in outstanding revenue bonds including the following: $26.7 million of 2019 Airport refunding bonds, $6.0 million of 2016 Sewer refunding bonds, and $5.5 million of 2014 Waterfront refunding bonds.

Certificates of Participation
The Water Fund has $9.1 million in outstanding COP bonds which refunded the 2002 COP bonds in 2013 issued at $22.7 million. These proceeds were used to finance capital improvements to the water distribution system.

Loans
Of the outstanding $122.8 million in loans payable in the Business-Type Activities, $81 million relates to the Water Fund. Two of the Water Fund loans are low-interest loans from the State Department of Water Resources (SDWR) used to fund the Cater Water Treatment Plant Project, the Ortega Ground Water Treatment Plant Project and the Cater Water Treatment Plant-Phase III Project. Approximately 40% of the SDWR loans will be reimbursed by the Montecito Water District and the Carpinteria Water District for the Cater Water Treatment Plant Project pursuant to a long-standing joint powers agreement. The third loan is a low interest loan from the State Water Resources Control Board used to fund the Desalination Plant Reactivation Project. The Desalination Project loan was issued for $80 million, with an outstanding balance of $58.9 million at June 30, 2022. The Desalination Project was completed in Fiscal Year 2018.

The Waterfront Fund has $8.5 million in outstanding loans from the State Department of Parks & Recreation, Division of Boating and Waterways, used to finance major renovations to the marina.

The Airport Fund carries outstanding loans from the State Department of Transportation totaling $0.41 million, used to finance capital improvements at the airport. Lastly, the Wastewater Fund accounts for $32.9 million in loans from the California State Water Resources Control Board for sewer infrastructure improvements. Additional information on the City of Santa Barbara’s long-term debt can be found in Note 7 to the financial statements. At this time all City Funds have sufficient reserves and cash-flow projections to meet all current debt obligations in the near future. (32)
ECONOMIC FACTORS AND NEXT YEAR’S BUDGET
The City of Santa Barbara’s largest industry is tourism. The mild and sunny climate attract visitors from all over the world, who stay in the local lodging establishments, shop in the local stores and dine in the local restaurants. Consequently, the City receives a fair amount of revenues that are either directly or indirectly tied to tourism. In the General Fund, for example, sales taxes and transient occupancy taxes (TOT) represent more than half of its total revenues. Other operations outside of the General Fund are also dependent, to varying degrees, on tourism. These include the Waterfront Fund, which accounts for the activities along the beach, including Sterns Wharf and the harbor. Its revenues are primarily derived from parking and percentage rents from merchants (shops and restaurants). These revenues are largely impacted by economic conditions, but also by weather. Similarly, the Airport Fund is affected by trends and economic conditions that affect travel.

Between 2012 and 2015, the hospitality sector realized tremendous gains of 7-15% annually. A number of factors played into this, but the unusually warm and dry weather played a significant role, attracting many visitors to the area. The strong demand for hotel rooms resulted in increases to both occupancy rates as well as room rates. The City benefited from this activity in that a 12% transient occupancy tax (TOT) applies to all room rates (2% of this tax is transferred to the Creeks Division, as Measure B revenue leaving 10% for General Fund purposes).

Until Mid-March 2020, all revenues and expenditures were continuing to meet or exceed budget expectations continuing to build on the longest economic expansion on record. Many economic sectors experienced significantly reduced activity or a complete standstill during March of 2020 due to shutdowns in response to the COVID-19 pandemic. As of June 30, 2022, the economy has rebounded to pre-pandemic levels, on many accounts, and primarily with higher sales and transient occupancy taxes. Employment levels in local industries are strong with very low unemployment rates. The City’s employment levels have been impacted, however, with an average vacancy rate of 10% or more at periods throughout the pandemic and still occurring beyond Fiscal Year 2022.

Economic indicators have been suggesting that an economic slowdown and possible recession would occur late in Fiscal Year 2022 and in the months following; however, an whole-scale economic slowdown has not occurred as tax revenues have remained strong. Property values in Santa Barbara have generally remained strong during the pandemic and show signs of continued growth into the next fiscal year. Because a majority of the City’s General Fund revenues are comprised of highly variable and tourism-dependent activities in sales and transient occupancy taxes, the City will continue to closely monitor and maintain conservative budgeting practices in projecting future revenues.

Property taxes are another major source of General Fund revenue, representing approximately 23% of total General Fund revenues, the state of the housing market plays a key role in the City's finances.

The recent trends of real estate investment interest in larger, single-family homes during the pandemic have supported continued stability in local property values and activities. Property taxes are projected to continue to be a strong source of revenue for the City. Modest increases are anticipated to continue in the next year with more typical annual increases anticipated in the coming years.

The Fiscal Year 2023 budget reflects a continuance of more stable economic and city activities after a period of two years of instability directly related to the pandemic. Overall, General Fund revenues were budgeted to decline slightly in fiscal year 2023 compared to the prior year due to (33)
the signaling of a economic slowdown and possible recession. The Fiscal Year 2023 budget represents a plan for the delivery of services to meet the needs of the City’s residents and visitors during a challenging time of economic uncertainty. It is likely that the economy will perform strong than initially anticipated in the Fiscal Year 2023 budget that will provide greater stability for the City’s operation.

A longer-term view highlights continued challenges in the coming years as the ongoing revenue growth from existing revenues will likely not be enough to cover ongoing expenditure growth from existing operations. Like most full service municipalities, personnel costs are the largest area of expense in the General Fund. Although salary increases have been low to moderate in comparison to other agencies, increases in retirement costs are driving the overall cost increases with regard to City personnel costs.

California Public Employees Retirement System (CalPERS) has adopted more conservative funding policies, resulting in the requirement for member agencies to make substantial increases in employer contributions that started in 2016 and will continue until at least 2025 and beyond. Modest revenue growth coupled with exceptional increases in retirement costs over the next five years will challenge the City to maintain a balanced budget. Should the economic expansion stall or fall into recession, this challenge will only heighten.

In December of 2022, the City Council took decisive action to address the City’s pension costs and liabilities more substantially by directing staff to develop a pension management policy also allocated General Fund resources to be used to set up a Section 115 trust – a proven, effective tool that many municipalities use to address pension costs.

The City will consider a variety of short- and long-term strategies to effectively manage through current economic uncertainty and rising costs. These strategies may include continuing to control expenditures to achieve savings, considering revenue generating options and resource realignment focusing on the City Council’s priorities.

REQUESTS FOR INFORMATION
This financial report is designed to provide our citizens, taxpayers, customers, investors, and creditors with a general overview of the City’s finances and to demonstrate the City’s accountability for the money it receives. If you have any questions about this report or need any additional financial information, please access the City’s Internet web site at www.SantaBarbaraCa.gov/Finance/BudgetReports. You may also contact the City’s Finance Department at PO Box 1990 (735 Anacapa Street), Santa Barbara, California, 93101, (805) 564-5528, or email the Accounting Division, at [email protected].
(34)

BASIC FINANCIAL STATEMENTS

CITY OF SANTA BARBARA

STATEMENT OF NET POSITION
JUNE 30, 2022
See accompanying Notes to Basic Financial Statements.
(35)
Governmental Business-Type Activities Activities Total ASSETS Current Assets: Pooled Cash and Investments 141,508,377 $ 182,639,577 $ 324,147,954 $ Receivables: Accounts, Net 32,372,169 28,477,707 60,849,876 Loans 79,004,437 - 79,004,437 Interest 624,630 - 624,630 Leases 178,536 7,535,039 7,713,575 Due from Other Governments 16,248 - 16,248 Prepaid Assets and Deposits 2,713,585 4,344,484 7,058,069 Inventory - 82,635 82,635
Internal Balances 7,039,722 (7,039,722) - Total Current Assets 263,457,704 216,039,720 479,497,424 Noncurrent Assets: Receivables: Loans - 4,360,334 4,360,334 Leases 4,490,318 30,789,826 35,280,144 Restricted: Cash and Investments with Fiscal Agents - 3,383,546 3,383,546 Capital Assets:

Not Being Depreciated 240,505,628 47,643,569 288,149,197 Being Depreciated, Net 279,679,368 531,008,112 810,687,480 Total Noncurrent Assets 524,675,314 617,185,387 1,141,860,701 Total Assets 788,133,018 833,225,107 1,621,358,125 DEFERRED OUTFLOWS OF RESOURCES Pension-Related items 46,534,651 8,423,108 54,957,759 OPEB-Related items 12,943,283 - 12,943,283 Deferred Charge on Refunding - 1,178,304 1,178,304 Total Deferred Outflows of Resources 59,477,934 9,601,412 69,079,346 LIABILITIES Current Liabilities: Accounts Payable 10,655,166 18,272,174 28,927,340 Salaries and Benefits Payable 5,422,569 1,093,614 6,516,183 Interest Payable - 1,139,350 1,139,350
Unearned Revenue 10,144,562 512,133 10,656,695 Deposits 650,428 2,458,897 3,109,325 Due to Other Governments 13,158,377 - 13,158,377 Lease Payable 352,522 69,165 421,687 Compensated Absences 8,099,306 295,575 8,394,881 Claims Liabilities 5,555,614 - 5,555,614 Total OPEB Liability 2,145,219 - 2,145,219
Long-Term Debt 518,364 12,748,322 13,266,686 Total Current Liabilities 56,702,127 36,589,230 93,291,357 Noncurrent Liabilities: Unearned Revenue - 4,360,334 4,360,334 Lease Payable 1,620,086 113,181 1,733,267 Net Pension Liability 204,551,666 33,714,468 238,266,134 Total OPEB Liability 51,779,506 - 51,779,506 Compensated Absences 899,923 2,613,074 3,512,997 Claims Liability 12,768,172 - 12,768,172 Long-Term Debt 3,275,011 162,566,907 165,841,918 Total Noncurrent Liabilities 274,894,364 203,367,964 478,262,328 Total Liabilities 331,596,491 239,957,194 571,553,685 DEFERRED INFLOWS OF RESOURCES Lease Related 4,550,100 37,531,466 42,081,566 Pension Related 95,719,180 18,191,479 113,910,659 OPEB Related 8,368,983 - 8,368,983 Total Deferred Inflows of Resources 108,638,263 55,722,945 164,361,208 NET POSITION Net Investment in Capital Assets 518,120,325 398,278,166 916,398,491 Restricted for: Administration 33,780 - 33,780 Public Safety Projects 1,783,720 - 1,783,720 Public Works 23,805,785 - 23,805,785 Community Services 5,964,571 - 5,964,571 Community Development 3,308,440 - 3,308,440 Capital Improvements 2,683,535 - 2,683,535 Debt Service Reserve - 3,383,546 3,383,546 Airport Improvements - 2,279,259 2,279,259
Affordable Housing 67,883,756 - 67,883,756 Unrestricted (216,207,714) 143,205,409 (73,002,305) Total Net Position 407,376,198 $ 547,146,380 $ 954,522,578 $

CITY OF SANTA BARBARA

STATEMENT OF ACTIVITIES
YEAR ENDED JUNE 30, 2022
See accompanying Notes to Basic Financial Statements.
(36)
Program Revenues
Operating Capital
Charges for Grants and Grants and
Functions/Programs Expenses Services Contributions Contributions Governmental Activities
Administration 19,176,420 $ 3,659,118 $ 8,707,260 $ - $ Public Safety 5,965,052 90,023,258 3,486,876 -
Public Works 37,767,154 7,558,006 685,806 22,688,201
Community Services 24,973,318 7,396,836 1,327,395 -
Community Development 15,458,981 7,441,155 8,152,194 -
Sustainability and Resilience 109,765 - - -
Total Governmental Activities 187,508,896 32,020,167 22,359,531 22,688,201 Business-Type Activities
Water 50,912,908 69,057,629 11,982,066 -
Wastewater 22,307,034 25,806,729 - -
Airport 27,529,554 25,920,364 5,907,498 255,231
Waterfront 14,387,354 17,241,280 - 37,003
Solid Waste 30,333,012 34,293,752 23,211 -
Downtown Parking 6,082,120 9,172,583 - -
Golf Course 3,401,465 4,228,617 - -
Clean Energy 14,718,475 16,021,442 - -
Total Business-Type Activities 174,065,352 197,348,966 17,912,775 292,234 Total 361,574,248 $ 229,369,133 $ 40,272,306 $ 22,980,435 $ General Revenues
Taxes:

Property Taxes (Net of Pass-Through
Payments)
Transient Occupancy
Sales and Use
Business License
Utility Users
Cannabis
Real Property Transfer Tax
Other Taxes
Franchise Fees
Unrestricted Motor Vehicle License-in-Lieu
Investment Income
Other Revenue
Transfers
Total General Revenues and Transfers
Change in Net Position
Net Position - Beginning of Year
Net Position - End of Year

CITY OF SANTA BARBARA

STATEMENT OF ACTIVITIES (CONTINUED)
YEAR ENDED JUNE 30, 2022
See accompanying Notes to Basic Financial Statements.
(37)
Functions/Programs
Governmental Activities
Administration
Public Safety
Public Works
Community Services
Community Development
Sustainability and Resilience
Total Governmental Activities
Business-Type Activities
Water
Wastewater
Airport
Waterfront
Solid Waste
Downtown Parking
Golf Course
Clean Energy
Total Business-Type Activities
Total
General Revenues
Taxes:

Property Taxes (Net of Pass-Through
Payments)
Transient Occupancy
Sales and Use
Business License
Utility Users
Cannabis
Real Property Transfer Tax
Other Taxes
Franchise Fees
Unrestricted Motor Vehicle License-in-Lieu
Investment Income
Other Revenue
Transfers
Total General Revenues and Transfers
Change in Net Position
Net Position - Beginning of Year
Net Position - End of Year
Net (Expense) Revenue and
Changes in Net Position
Governmental Business-Type
Activities Activities Total
$ - (6,810,042) $ $ (6,810,042)
- (80,571,330) (80,571,330)
- (6,835,141) (6,835,141)
- (16,249,087) (16,249,087)
- 134,368 134,368
- (109,765) (109,765)
- (110,440,997) (110,440,997)
30,126,787 - 30,126,787
3,499,695 - 3,499,695
4,553,539 - 4,553,539
2,890,929 - 2,890,929
3,983,951 - 3,983,951
- (3,090,463) (3,090,463)
827,152 - 827,152
- (1,302,967) (1,302,967)
41,488,623 - 41,488,623
41,488,623 (110,440,997) (68,952,374)
- 42,225,898 42,225,898
- 31,955,795 31,955,795
- 59,328,160 59,328,160
- 2,667,092 2,667,092
- 15,609,758 15,609,758
- 1,672,274 1,672,274
- 1,352,652 1,352,652
- 5,501 5,501
- 4,176,091 4,176,091
- 107,502 107,502
(1,660,533) (3,857,780) (5,518,313)
188,823 745,428 934,251
2,693,115 (2,693,115) -
155,492,503 154,516,661 (975,842)
40,512,781 45,051,506 85,564,287
506,633,599 362,324,692 868,958,291
$ 547,146,380 407,376,198 $ 954,522,578 $

CITY OF SANTA BARBARA

BALANCE SHEET

GOVERNMENTAL FUNDS
JUNE 30, 2022
See accompanying Notes to Basic Financial Statements.
(38)
Special Revenue
Fund Other Total
General Affordable Governmental Governmental
Fund Housing Funds Funds
ASSETS
Pooled Cash and Investments 37,797,377 $ 2,049,624 $ 70,906,854 $ 110,753,855 $ Receivables:

Accounts, Net 17,307,342 182,405 14,752,819 32,242,566
Loans 118,353 65,727,707 13,158,377 79,004,437
Interest 624,630 - - 624,630
Leases, Current 157,248 - 21,288 178,536
Leases, Noncurrent 4,134,741 - 355,577 4,490,318
Due from Other Governments 16,248 - - 16,248
Prepaids Assets and Deposits 121,676 - - 121,676
Interfund Receivables 10,346,824 - - 10,346,824
Advances to Other Funds 2,527,707 - - 2,527,707
Total Assets 73,152,146 $ 67,959,736 $ 99,194,915 $ 240,306,797 $

LIABILITIES, DEFERRED INFLOWS

OF RESOURCES AND

FUND BALANCES

LIABILITIES
Accounts Payable 2,727,252 $ 63,533 $ 5,437,553 $ 8,228,338 $ Salaries and Benefits Payable 4,715,492 12,447 301,165 5,029,104 Unearned Revenue 9,110,055 - 955,907 10,065,962
Deposits 437,532 - 212,896 650,428
Due to Other Governments - - 13,158,377 13,158,377
Interfund Payables - - 7,851,328 7,851,328
Advances from Other Funds - - 2,122,416 2,122,416
Total Liabilities 16,990,331 75,980 30,039,642 47,105,953

DEFERRED INFLOWS OF RESOURCES
Leases 4,180,757 - 369,343 4,550,100
Unavailable Revenue 412,923 - 9,283,546 9,696,469
Total Deferred Inflows of Resources 4,593,680 - 9,652,889 14,246,569

FUND BALANCES
Nonspendable 7,059,725 - - 7,059,725
Restricted 2,503,742 67,883,756 27,978,150 98,365,648
Committed 39,126,117 - 40,552,453 79,678,570
Unassigned 2,878,551 - (9,028,219) (6,149,668)
Total Fund Balances 51,568,135 67,883,756 59,502,384 178,954,275 Total Liabilities, Deferred
Inflows of Resources
and Fund Balances 73,152,146 $ 67,959,736 $ 99,194,915 $ 240,306,797 $

CITY OF SANTA BARBARA

RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS

TO THE NET POSITION OF GOVERNMENTAL ACTIVITIES
JUNE 30, 2022
See accompanying Notes to Basic Financial Statements.
(39)
Fund Balances for Governmental Funds 178,954,275 $
Amounts reported for governmental activities in the statement of net position are different because:

Capital assets, net of accumulated depreciation, used in governmental activities are not current financial resources and, therefore are not reported in the fund financial statements. This amount does not include $20,675,766 of internal service funds net capital assets.

Capital Assets Not Being Depreciated 235,853,879 $
Capital Assets Being Depreciated 437,152,256
Accumulated Depreciation 499,509,230 (173,496,905)
Long-term liabilities applicable to the City’s governmental activities are not due and payable in the current period and accordingly are not reported as fund liabilities.

All liabilities, both current and long-term, are reported in the Statement of Net Position. Balances at June 30, 2022 are:

Compensated Absences (8,320,985)
Lease Obligations (1,972,608)
Pension-related debt applicable to the City’s governmental activities are not due and payable in the current period and accordingly are not reported as fund liabilities. Deferred outflows of resources and deferred inflows of resources related to pensions are only reported in the statement of net position as the changes in these amounts affect only the government-wide statements for governmental activities.

Deferred Outflows of Resources - Pension Related 44,352,833 Deferred Inflows of Resources - Pension Related (91,007,087) Total Pension Liability (111,392)
Net Pension Liability (194,195,591) (240,961,237)
Internal Service funds are used by management to charge the costs of certain activities involved in rendering services to departments within the City. The assets and liabilities of the internal service funds are included in governmental in the Statement of Net Position. (29,528,946)
Receivables that are measurable but not available are recorded as deferred inflows of resources under the modified accrual basis of accounting. 9,696,469 Net Position of Governmental Activities 407,376,198 $

CITY OF SANTA BARBARA

STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES

GOVERNMENTAL FUNDS
YEAR ENDED JUNE 30, 2022
See accompanying Notes to Basic Financial Statements.
(40)
Special Revenue
Fund
Other Total
General Affordable Governmental Governmental
Fund Housing Funds Funds

REVENUES
Taxes 141,665,066 $ - $ 18,436,838 $ 160,101,904 $
Franchise Fees 4,176,091 - - 4,176,091
Intergovernmental 8,096,808 - 18,616,080 26,712,888
Charges for Services 26,224,289 - 392,691 26,616,980
Use of Money and Property (2,228,391) 1,402,140 (447,714) (1,273,965) Fines and Forfeitures 2,334,683 - 914,529 3,249,212
Program Income - - 409,486 409,486
Other 11,783,066 - 1,446,932 13,229,998
Total Revenues 192,051,612 1,402,140 39,768,842 233,222,594

EXPENDITURES
Current:

Mayor and City Council 3,469,045 - - 3,469,045
City Attorney - 5,074,830 - 5,074,830
City Administration 4,262,574 - - 4,262,574
Human Resources 1,937,370 - - 1,937,370
Finance 6,153,633 - 20,648 6,174,281
Public Safety - 79,737,205 863,855 80,601,060
Public Works 9,038,773 - 14,928,394 23,967,167
Community Services 23,839,923 - 1,520,603 25,360,526
Community Development 12,676,048 1,076,882 2,964,862 16,717,792 Sustainability and Resilience 109,765 - - 109,765
Capital Outlay - - 34,651,789 34,651,789
Debt Service:

Principal Retirement 333,713 - - 333,713
Interest and Fiscal Charges 84,186 - - 84,186
Total Expenditures 146,717,065 1,076,882 54,950,151 202,744,098

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES 325,258 45,334,547 30,478,496 (15,181,309)

OTHER FINANCING SOURCES (USES)
Lease Obligation 1,178,796 - - 1,178,796
Transfers In 1,815,159 8,674 40,146,107 41,969,940
Transfers Out - (35,494,681) (8,996,793) (44,491,474)
Total Other Financing
Sources (Uses) 8,674 (32,500,726) 31,149,314 (1,342,738) NET CHANGE IN FUND BALANCE 333,932 12,833,821 15,968,005 29,135,758 Fund Balances - Beginning Of Year 38,734,314 67,549,824 43,534,379 149,818,517 FUND BALANCES - END OF YEAR $ 67,883,756 51,568,135 $ 59,502,384 $ 178,954,275 $

CITY OF SANTA BARBARA

RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN

FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES YEAR ENDED JUNE 30, 2022
See accompanying Notes to Basic Financial Statements.
(41)
Net Change in Fund Balances - Total Governmental Funds 29,135,758 $ Amounts reported for governmental activities in the statement of activities are different because:

Governmental funds report capital outlays as expenditures and do not include capital contributions. However, in the Statement of Activities, the costs of those assets are allocated over their estimated useful lives as depreciation expense and capital contributions are recognized as revenue. This is the amount by which capital outlay exceeded depreciation expense in the current period and the amount of capital contributions received.

Capital Outlay $ 22,581,687
Depreciation Expense 13,398,490 (9,183,197)
The issuance of long-term debt provides current financial resources to governmental funds, while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds.

Neither transaction, however, has any effect on net position.

These amounts are the net effect of these differences in the treatment of long-term debt and related items.

Lease Obligation 1,178,796
Principal Paid 333,713
Compensated absences expenses reported in the statement of activities do not require the use of current financial resources and therefore are not reported as expenditures in the governmental funds. (1,379,627)
Pension expense reported in the governmental funds includes the annual required contributions. In the statement of activities, pension expense includes the change in the net pension liability, and related changes in pension amounts for deferred outflows of resources and deferred inflows of resources. 3,789,746 Certain revenues in the governmental funds are deferred because they are not collected within the prescribed time period after year-end. However, the revenues are included on the accrual basis used in the government-wide statements. This amount represents the change during the fiscal year. 2,936,092 Internal service funds are used by management to charge costs of activities involved in rendering services to departments within the City. The changes in net position of the internal service funds are included in the statement of activities. (4,341,462) Change in Net Position of Governmental Activities 45,051,506 $

CITY OF SANTA BARBARA

STATEMENT OF NET POSITION

PROPRIETARY FUNDS
JUNE 30, 2022
See accompanying Notes to Basic Financial Statements.
(42)
Water Wastewater Airport Waterfront
ASSETS Current Assets: Pooled Cash and Investments 102,028,153 $ 19,775,062 $ 30,668,550 $ 14,970,795 $ Accounts Receivable, Net 13,713,977 3,918,916 76,546 114,133 Prepaid Assets 3,835,802 - - - Deposits - - - - Leases Receivable 13,539 31,333 3,668,206 3,331,977 Inventories - - - - Total Current Assets 119,591,471 23,725,311 34,413,302 18,416,905 Noncurrent Assets: Restricted: Cash and Investments with Fiscal Agent 2,791,987 1 2 591,556 Advances to Other Funds - - - - Leases Receivable 14,020 379,650 15,453,998 13,554,457 Loans Receivable 4,360,334 - - - Capital Assets:

Nondepreciable 18,198,717 8,201,084 9,048,363 1,070,842 Depreciable, Net 226,255,928 103,352,750 149,857,345 24,634,001 Total Noncurrent Assets 251,620,986 111,933,485 174,359,708 39,850,856 Total Assets 371,212,457 135,658,796 208,773,010 58,267,761

DEFERRED OUTFLOWS OF RESOURCES
Deferred Charge on Refunding 324,482 57,311 557,090 239,421 Pension-Related Items 2,631,275 1,777,677 1,911,609 1,057,828 OPEB-Related items - - - - Total Deferred Outflows of Resources 2,955,757 1,834,988 2,468,699 1,297,249 LIABILITIES Current Liabilities: Accounts Payable 5,861,389 1,223,954 632,325 443,096 Salaries and Benefits Payable 309,632 199,612 238,280 188,370 Interest Payable 96,420 307,631 328,710 406,589 Unearned Revenue - - - 227,804 Deposits 573,284 232 1,183,024 672,369
Interfund Payable - - - - Compensated Absences Payable 100,840 59,574 45,482 53,847 Lease Payable - - - - Claims Payable - - - - Total OPEB Liability, due in one year - - - - Current Portion Long-Term Debt 7,339,420 2,624,755 1,323,061 1,461,086 Total Current Liabilities 14,280,985 4,415,758 3,750,882 3,453,161 Noncurrent Liabilities: Advances from Other Funds - - - - Unearned Revenue 4,360,334 - - - Net Pension Liability 10,196,293 6,632,251 5,613,719 4,931,437 Total Other Postemployment Benefit Liability - - - - Compensated Absences Payable, Net of Current Portion 886,552 526,785 402,175 476,143 Lease Payable, Net of Current Portion - - - - Claims Payable, Net of Current Portion - - - - Long-Term Debt, Net of Current Portion 83,714,964 36,942,047 29,396,394 12,513,502 Total Noncurrent Liabilities 99,158,143 44,101,083 35,412,288 17,921,082 Total Liabilities 113,439,128 48,516,841 39,163,170 21,374,243

DEFERRED INFLOWS OF RESOURCES
Lease Related 26,292 406,759 18,737,110 16,547,797
Pension Related 5,682,794 3,839,269 4,128,523 2,284,602 OPEB Related - - - - Total Deferred Inflows of Resources 5,709,086 4,246,028 22,865,633 18,832,399 NET POSITION Net Investment in Capital Assets 148,722,921 71,115,566 128,720,202 11,731,920 Restricted for Debt Service 2,791,987 1 2 591,556 Restricted for Airport Improvements - - 2,279,259 - Unrestricted 103,505,092 13,615,348 18,213,443 7,034,892 Total Net Position 255,020,000 $ 84,730,915 $ 149,212,906 $ 19,358,368 $ Prior years’ accumulated adjustment to reflect the consolidation of internal service funds activities related to the enterprise funds Current year’s adjustment to reflect the consolidation of internal service funds’ activities related to the enterprise funds Net Position of Business-Type Activities

CITY OF SANTA BARBARA

STATEMENT OF NET POSITION (CONTINUED)

PROPRIETARY FUNDS
JUNE 30, 2022
See accompanying Notes to Basic Financial Statements.
(43)
Other Enterprise Internal
Solid Waste Funds Total Service Funds
ASSETS
Current Assets:

Pooled Cash and Investments 6,642,245 $ 8,554,772 $ 182,639,577 $ 30,754,522 $ Accounts Receivable, Net 5,330,070 5,324,065 28,477,707 129,603 Prepaid Assets - 283,682 4,119,484 2,591,909 Deposits - 225,000 225,000 - Leases Receivable - 489,984 7,535,039 - Inventories - 82,635 82,635 - Total Current Assets 11,972,315 14,960,138 223,079,442 33,476,034 Noncurrent Assets:

Restricted:

Cash and Investments with Fiscal Agent - - 3,383,546 - Advances to Other Funds - - - 2,122,416 Leases Receivable - 1,387,701 30,789,826 - Loans Receivable - - 4,360,334 - Capital Assets:

Nondepreciable - 11,124,563 47,643,569 4,651,749 Depreciable, Net - 26,908,088 531,008,112 16,024,017 Total Noncurrent Assets - 39,420,352 617,185,387 22,798,182 Total Assets 11,972,315 54,380,490 840,264,829 56,274,216

DEFERRED OUTFLOWS OF RESOURCES
Deferred Charge on Refunding - - 1,178,304 - Pension-Related Items 366,419 678,300 8,423,108 2,181,818 OPEB-Related items - - - 12,943,283 Total Deferred Outflows of Resources 366,419 678,300 9,601,412 15,125,101

LIABILITIES
Current Liabilities:

Accounts Payable 4,060,061 6,051,349 18,272,174 2,426,828 Salaries and Benefits Payable 34,469 123,251 1,093,614 393,465 Interest Payable - - 1,139,350 - Unearned Revenue 132,171 152,158 512,133 78,600 Deposits - 29,988 2,458,897 - Interfund Payable - - - 2,495,496 Compensated Absences Payable 6,865 28,967 295,575 608,420 Lease Payable - 69,165 69,165 - Claims Payable - - - 5,625,607 Total OPEB Liability, due in one year - - - 2,234,742 Current Portion Long-Term Debt - - 12,748,322 518,364 Total Current Liabilities 4,233,566 6,454,878 36,589,230 14,381,522 Noncurrent Liabilities:

Advances from Other Funds - 2,503,567 2,503,567 24,140 Unearned Revenue - - 4,360,334 - Net Pension Liability 933,018 5,407,750 33,714,468 10,244,683 Total Other Postemployment Benefit Liability - - - 51,689,983 Compensated Absences Payable, Net of Current Portion 60,712 260,707 2,613,074 69,824 Lease Payable, Net of Current Portion - 113,181 113,181 - Claims Payable, Net of Current Portion - - - 12,698,179 Long-Term Debt, Net of Current Portion - - 162,566,907 3,275,011 Total Noncurrent Liabilities 993,730 8,285,205 205,871,531 78,001,820 Total Liabilities 5,227,296 14,740,083 242,460,761 92,383,342

DEFERRED INFLOWS OF RESOURCES
Lease Related - 1,813,508 37,531,466 Pension Related 791,358 1,464,933 18,191,479 4,712,093 OPEB Related - - - 8,368,983 Total Deferred Inflows of Resources 791,358 3,278,441 55,722,945 13,081,076 NET POSITION Net Investment in Capital Assets - 37,987,557 398,278,166 20,366,182 Restricted for Debt Service - - 3,383,546 - Restricted for Airport Improvements - - 2,279,259 - Unrestricted 6,320,080 (947,291) 147,741,564 (54,431,283) Total Net Position 6,320,080 $ 37,040,266 $ 551,682,535 (34,065,101) $ Prior years’ accumulated adjustment to reflect the consolidation of internal service funds activities related to the enterprise funds (950,751 ) Current year’s adjustment to reflect the consolidation of internal service funds’ activities related to the enterprise funds (3,585,404) Net Position of Business-Type Activities 547,146,380 $

CITY OF SANTA BARBARA

STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION

PROPRIETARY FUNDS
YEAR ENDED JUNE 30, 2022
See accompanying Notes to Basic Financial Statements.
(44)
Water Wastewater Airport Waterfront

OPERATING REVENUES
Sales 62,300,367 $ 24,891,572 $ - $ - $
Service Charges 4,578,283 834,403 7,008,324 11,008,927
Leases and Rents - 49,905 18,731,268 5,769,839
Other Revenues 2,178,979 30,849 180,772 462,514
Total Operating Revenues 69,057,629 25,806,729 25,920,364 17,241,280

OPERATING EXPENSES
Salaries, Wage, and Benefits 9,651,237 6,066,672 7,010,979 6,534,773 Material, Supplies, and Services 29,450,992 9,589,360 11,868,664 5,291,894 Depreciation 9,902,849 5,295,858 6,678,480 1,572,809
Total Operating Expenses 49,005,078 20,951,890 25,558,123 13,399,476 OPERATING INCOME (LOSS) 4,854,839 20,052,551 362,241 3,841,804

NONOPERATING REVENUES (EXPENSES)
Interest Income (2,860,156) (546,162) (44,942) 260,507
Intergovernmental Revenue 11,982,066 - 5,907,498 -
Other Income - - 188,823 -
Interest Expense (867,232) (882,383) (1,407,515) (642,537) Total Nonoperating Revenues
(Expenses) 8,254,678 (1,428,545) 4,643,864 (382,030)

INCOME (LOSS) BEFORE TRANSFERS AND
CONTRIBUTIONS 3,426,294 28,307,229 5,006,105 3,459,774

CONTRIBUTIONS
Capital Contributions - - 255,231 37,003

TRANSFERS
Transfers In 203,701 135,537 146,443 128,603
Transfers Out (161,237) (10,216) (13,105) (9,414)
Total Transfers 42,464 125,321 133,338 119,189
CHANGES IN NET POSITION 3,551,615 28,349,693 5,394,674 3,615,966 Total Net Position - Beginning of Year 226,670,307 81,179,300 143,818,232 15,742,402 TOTAL NET POSITION - END OF YEAR $ 84,730,915 255,020,000 $ 149,212,906 $ 19,358,368 $ Adjustment to Reflect the Consolidation of Internal
Service Fund Activities Related to Enterprise Funds
Change in Net Position - Enterprise Funds
Change in Net Position of Business-Type Activities

CITY OF SANTA BARBARA

STATEMENT OF REVENUES, EXPENSES, AND

CHANGES IN FUND NET POSITION (CONTINUED)

PROPRIETARY FUNDS
YEAR ENDED JUNE 30, 2022
See accompanying Notes to Basic Financial Statements.
(45)

OPERATING REVENUES
Sales
Service Charges
Leases and Rents
Other Revenues
Total Operating Revenues

OPERATING EXPENSES
Salaries, Wage, and Benefits
Material, Supplies, and Services
Depreciation
Total Operating Expenses

OPERATING INCOME (LOSS)

NONOPERATING REVENUES (EXPENSES)
Interest Income
Intergovernmental Revenue
Other Income
Interest Expense
Total Nonoperating Revenues
(Expenses)

INCOME (LOSS) BEFORE TRANSFERS AND

CONTRIBUTIONS

CONTRIBUTIONS
Capital Contributions

TRANSFERS
Transfers In
Transfers Out
Total Transfers

CHANGES IN NET POSITION
Total Net Position - Beginning of Year

TOTAL NET POSITION - END OF YEAR
Adjustment to Reflect the Consolidation of Internal
Service Fund Activities Related to Enterprise Funds
Change in Net Position - Enterprise Funds
Change in Net Position of Business-Type Activities
Other Enterprise Internal
Solid Waste Funds Total Service Funds
$ - 34,274,308 $ 121,466,247 $ - $
24,302,369 - 47,732,306 30,900,619
394,576 - 24,945,588 -
332,267 19,444 3,204,825 666,958
25,029,212 34,293,752 197,348,966 31,567,577
4,029,241 1,149,966 34,442,868 15,740,456
22,764,998 28,631,872 107,597,780 20,532,113
1,486,550 - 24,936,546 2,361,970
28,280,789 29,781,838 166,977,194 38,634,539
(3,251,577) 4,511,914 30,371,772 (7,066,962)
(152,650) (196,155) (3,539,558) (679,286)
- 23,211 17,912,775 -
- - 188,823 -
(21,308) - (3,820,975) (9,038)
(173,958) (172,944) 10,741,065 (688,324)
(3,425,535) 4,338,970 41,112,837 (7,755,286)
- - 292,234 -
2,309,184 20,239 2,943,707 992,431
(4,675) (51,946) (250,593) (1,164,011)
2,304,509 (31,707) 2,693,114 (171,580)
(1,121,026) 4,307,263 44,098,185 (7,926,866)
38,161,292 2,012,817 507,584,350 (26,138,235)
$ 37,040,266 6,320,080 $ 551,682,535 $ (34,065,101) $
$ (3,585,404)
44,098,185
$ 40,512,781

CITY OF SANTA BARBARA

STATEMENT OF CASH FLOWS

PROPRIETARY FUNDS
YEAR ENDED JUNE 30, 2022
See accompanying Notes to Basic Financial Statements.
(46)
Water Wastewater Airport Waterfront

CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from Customers and Users 62,994,256 $ 25,505,427 $ 26,345,483 $ 17,414,872 $ Payments to Suppliers of Goods or Services (25,580,051) (9,802,338) (11,886,588) (5,169,101) Payments to Employees (12,183,096) (7,682,704) (8,867,442) (7,593,672) Receipts from Others 2,178,979 30,849 180,772 462,514
Net Cash Provided (Used) by
Operating Activities 27,410,088 8,051,234 5,772,225 5,114,613

CASH FLOWS FROM NONCAPITAL

FINANCING ACTIVITIES
Cash Transfers In 203,701 135,537 146,443 128,603
Cash Transfers Out (161,237) (10,216) (13,105) (9,414)
Advances from (to) Other Funds - - - -
Operating Grants Received 11,982,066 - 5,907,498 -
Net Cash Provided (Used) by
Noncapital Financing Activities 12,024,530 125,321 6,040,836 119,189

CASH FLOWS FROM CAPITAL AND

RELATED FINANCING ACTIVITIES
Acquisition of Capital Assets (17,348,229) (3,471,874) (722,417) (878,370) Principal Paid on Capital Debt (7,154,406) (2,555,613) (1,263,479) (1,407,541) Interest Paid (1,016,494) (1,002,724) (1,420,735) (630,957) Net Cash Provided (Used) by Capital and
Related Financing Activities (25,519,129) (7,030,211) (3,406,631) (2,916,868)

CASH FLOWS FROM INVESTING ACTIVITIES
Loans Provided 605,174 - - -
Change in Fair Value (3,673,398) (711,977) (1,105,556) (539,280) Interest Received 813,242 165,815 1,060,614 799,787
Net Cash Provided (Used) by
Investing Activities (2,254,982) (546,162) (44,942) 260,507

NET CHANGE IN CASH AND CASH
EQUIVALENTS 600,182 11,660,507 8,361,488 2,577,441
Cash and Cash Equivalents - Beginning Of Year 93,159,633 19,174,881 22,307,064 12,984,910 CASH AND CASH EQUIVALENTS - END OF YEAR $ 19,775,063 104,820,140 $ 30,668,552 $ 15,562,351 $

CITY OF SANTA BARBARA

STATEMENT OF CASH FLOWS (CONTINUED)

PROPRIETARY FUNDS
YEAR ENDED JUNE 30, 2022
See accompanying Notes to Basic Financial Statements.
(47)
Other Enterprise Internal
Solid Waste Funds Total Service Funds

CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from Customers and Users 33,226,438 $ 19,847,032 $ 185,333,508 $ 30,808,056 $ Payments to Suppliers of Goods or Services (28,931,044) (17,268,212) (98,637,334) (19,151,948) Payments to Employees (1,521,859) (4,361,039) (42,209,812) (12,443,889) Receipts from Others 19,444 332,267 3,204,825 666,958
Net Cash Provided (Used) by
Operating Activities 2,792,979 (1,449,952) 47,691,187 (120,823)

CASH FLOWS FROM NONCAPITAL

FINANCING ACTIVITIES
Cash Transfers In 20,239 2,309,184 2,943,707 992,431
Cash Transfers Out (51,946) (4,675) (250,593) (1,164,011) Advances from (to) Other Funds - 1,582,841 1,582,841 905,644 Operating Grants Received 23,211 - 17,912,775 -
Net Cash Provided (Used) by
Noncapital Financing Activities (8,496) 3,887,350 22,188,730 734,064

CASH FLOWS FROM CAPITAL AND

RELATED FINANCING ACTIVITIES
Acquisition of Capital Assets - (752,804) (23,173,694) (2,306,570) Principal Paid on Capital Debt - - (12,381,039) (95,370) Interest Paid - (21,308) (4,092,218) -
Net Cash Provided (Used) by Capital and
Related Financing Activities - (774,112) (39,646,951) (2,401,940)

CASH FLOWS FROM INVESTING ACTIVITIES
Loans Provided - - 605,174 -
Change in Fair Value (239,146) (282,884) (6,552,241) (858,397) Interest Received 42,991 130,234 3,012,683 179,111
Net Cash Provided (Used) by
Investing Activities (196,155) (152,650) (2,934,384) (679,286)

NET CHANGE IN CASH AND CASH
EQUIVALENTS 1,510,636 2,588,328 27,298,582 (2,467,985)
Cash and Cash Equivalents - Beginning Of Year 4,053,917 7,044,136 158,724,541 33,222,507 CASH AND CASH EQUIVALENTS - END OF YEAR $ 8,554,772 6,642,245 $ 186,023,123 $ 30,754,522 $

CITY OF SANTA BARBARA

STATEMENT OF CASH FLOWS (CONTINUED)

PROPRIETARY FUNDS
YEAR ENDED JUNE 30, 2022
See accompanying Notes to Basic Financial Statements.
(48)
Water Wastewater Airport Waterfront

RECONCILIATION OF OPERATING INCOME (LOSS)

TO NET CASH PROVIDED (USED) BY
OPERATING ACTIVITIES:

Operating Income (Loss) 20,052,551 $ 4,854,839 $ 362,241 $ 3,841,804 $ Adjustments to Reconcile Operating Income (Loss)
to Net Cash Provided (Used) by Operating Activities:

Depreciation and Amortization 9,902,849 5,295,858 6,678,480 1,572,809 (Increase) Decrease in Operating Assets and
Deferred Outflows of Resources:

Accounts Receivable (3,716,844) (266,229) 977,372 996,106 Lease Receivable (27,559) (410,983) (19,122,204) (16,886,434) Prepaids Assets and Deposits 668,136 - - -
Inventory - - - -
Deferred Outflows of Resources - Pension Related (40,963) 101,721 47,928 7,250 Deferred Outflows of Resources - OPEB - - - -
Increase (Decrease) in Operating Liabilities and
Deferred Inflows of Resources:

Accounts Payable 3,202,805 (212,978) (17,924) 122,793
Salaries and Benefits Payable (296,345) (206,717) (208,370) (197,578) Deposits Payable 438,891 - 13,613 14,664
Lease Payable - - - -
Unearned Revenue (605,174) - - (36,027)
Compensated Absences Payable 126,675 62,390 (6,531) 65,565 Net Pension Liability (7,899,604) (5,336,936) (5,739,024) (3,175,805) Total Other Postemployment Benefit Liability - - - -
Claims and Judgements - - - -
Deferred Inflows of Resources - Lease Related 26,292 406,759 18,737,110 16,547,797 Deferred Inflows of Resources - Pension Related 5,578,378 3,763,510 4,049,534 2,241,669 Deferred Inflows of Resources - OPEB Related - - - -
Total Adjustments 7,357,537 3,196,395 5,409,984 1,272,809 Net Cash Provided (Used) by
Operating Activities 27,410,088 $ 8,051,234 $ 5,772,225 $ 5,114,613 $

NONCASH CAPITAL AND
FINANCING ACTIVITIES:

Capital Contributions - $ - $ 255,231 $ 37,003 $

CITY OF SANTA BARBARA

STATEMENT OF CASH FLOWS (CONTINUED)

PROPRIETARY FUNDS
YEAR ENDED JUNE 30, 2022
See accompanying Notes to Basic Financial Statements.
(49)
Other Enterprise Internal
Solid Waste Funds Total Service Funds

RECONCILIATION OF OPERATING INCOME (LOSS)

TO NET CASH PROVIDED (USED) BY
OPERATING ACTIVITIES:

Operating Income (Loss) 4,511,914 $ (3,251,577) $ 30,371,772 $ (7,066,962) $ Adjustments to Reconcile Operating Income (Loss)
to Net Cash Provided (Used) by Operating Activities:

Depreciation and Amortization - 1,486,550 24,936,546 2,361,970 (Increase) Decrease in Operating Assets and
Deferred Outflows of Resources:

Accounts Receivable (1,156,830) (4,802,767) (7,969,192) (1,563) Lease Receivable - (1,877,685) (38,324,865) -
Prepaids Assets and Deposits - (131,043) 537,093 121,441 Inventory - (5,341) (5,341) -
Deferred Outflows of Resources - Pension Related 16,182 1,592 133,710 204,267 Deferred Outflows of Resources - OPEB - - - (1,857,407) Increase (Decrease) in Operating Liabilities and
Deferred Inflows of Resources:

Accounts Payable (299,172) 5,450,824 8,246,348 1,321,600 Salaries and Benefits Payable (40,873) (96,575) (1,046,458) (217,573) Deposits Payable - 7,602 474,770 (234)
Lease Payable - 182,346 182,346 -
Unearned Revenue 108,960 9,429 (522,812) (91,000)
Compensated Absences Payable (23,077) 54,235 279,257 70,499 Net Pension Liability (1,100,060) (1,728,577) (24,980,006) (5,732,618) Total Other Postemployment Benefit Liability - - - (252,493) Claims and Judgements - - - (62,642)
Deferred Inflows of Resources - Lease Related - 1,813,508 37,531,466 Deferred Inflows of Resources - Pension Related 775,935 1,437,527 17,846,553 4,615,909 Deferred Inflows of Resources - OPEB Related - - - 6,465,983 Total Adjustments (1,718,935) 1,801,625 17,319,415 6,946,139 Net Cash Provided (Used) by
Operating Activities 2,792,979 $ (1,449,952) $ 47,691,187 $ (120,823) $

NONCASH CAPITAL AND
FINANCING ACTIVITIES:

Capital Contributions - $ - $ 292,234 $ - $

CITY OF SANTA BARBARA

STATEMENT OF FIDUCIARY NET POSITION

FIDUCIARY FUNDS
JUNE 30, 2022
See accompanying Notes to Basic Financial Statements.
(50)
Private-Purpose Custodial
Trust Fund Funds
ASSETS
Current Assets:

Pooled Cash and Investments - $ 487,961 $
Accounts Receivable, Net - 72,122
Loans Receivable - 2,142,478
Total Current Assets - 2,702,561

LIABILITIES
Current Liabilities:

Accounts Payable - 27,556
Due to the City Of Santa Barbara - 16,248
Total Current Liabilities - 43,804

NET POSITION
Held in Trust:

Restricted for Housing Assistance - 2,602,883
Restricted for Law Enforcement - 55,874
Total Net Position - $ 2,658,757 $

CITY OF SANTA BARBARA

STATEMENT OF CHANGES IN FIDUCIARY NET POSITION

FIDUCIARY FUNDS
YEAR ENDED JUNE 30, 2022
See accompanying Notes to Basic Financial Statements.
(51)
Private-Purpose Custodial
Trust Fund Funds

ADDITIONS
Taxes - $ - $
Investment Income:

Interest - 63,929
Charges for Service - 153,772
Total Additions - 217,701

DEDUCTIONS
Administrative Expenses - 187,947
Contractual Services 278,589 -
Program Expenses - 903,789
Total Deductions 278,589 1,091,736
CHANGE IN NET POSITION (874,035) (278,589)
Net Position - Beginning of Year 278,589 3,532,792
NET POSITION - END OF YEAR $ 2,658,757 - $
(52)

CITY OF SANTA BARBARA

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
(53)
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The basic financial statements of the City of Santa Barbara, California (the City), have been prepared in conformity with accounting principles generally accepted in the United States of America (US GAAP) as applied to governmental agencies. The Governmental Accounting Standards Boards (GASB) is the accepted standards setting body for establishing governmental accounting and financial reporting principles. The following summary of the City’s more significant accounting policies is presented to assist the reader in interpreting the basic financial statements and other data in this report. These policies should be viewed as an integral part of the accompanying basic financial statements.

A. Description of the Financial Reporting Entity
The City’s reporting entity includes the City (the primary government) and its component units. In evaluating how to define the City for financial reporting purposes, management has considered all potential component units. The decision to include a potential component unit in the reporting entity was made by applying the criteria set forth in Governmental Accounting Standards Board (GASB) Statement No. 14, The Financial Reporting Entity, and applicable amendments including GASB 61. The basic, but not the only, criterion for including a potential component unit within the City’s reporting entity is whether the City Council, as the City’s governing body, has financial accountability for the potential component unit. The most significant manifestations of financial accountability include the ability of the Council to appoint a voting majority of the organization’s governing body and the ability to impose its will on the organization; or that there is a potential for the organization to provide specific financial benefits to, or impose specific financial burdens on, the City. The City may be deemed to be financially accountable if an organization is fiscally dependent on the City regardless of whether the organization has a separately elected governing board, a governing board appointed by a higher level of government or a jointly appointed board. In addition to those organizations for which the City may be financially accountable, other organizations for which the City is not financially accountable, but for which the nature and significance of their relationship with the City are such that exclusion would cause the City’s financial statements to be misleading or incomplete, may also be component units. Component units are presented on a “blended” basis when the component unit’s governing body is substantially the same as the City’s or the component unit provides services almost entirely to the City. In a blended presentation, a component unit’s balances and transactions are reported in a manner similar to the balances and transactions of the City. Based upon the application of these criteria, the following is a brief review of the City and each component unit within the City’s reporting entity.

CITY OF SANTA BARBARA

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
(54)
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) A. Description of the Financial Reporting Entity (Continued) City of Santa Barbara
The City of Santa Barbara (the primary government) was incorporated on August 26, 1850. The City is a charter city under the laws of the state of California and operates under a Council-Administrator form of government. The Council consists of six council members elected by district, and a mayor elected at-large. The City moved to district elections starting 2015 with three district seats elected in 2016, two further seats elected in 2017, and the final seat elected in June 2018. The current City Charter was adopted on May 2, 1967 and provides for the following services: public safety (police and fire), construction and maintenance of highways and streets, sanitation, culture and recreation, public improvements, planning, zoning and general administration. Enterprise funds, operated in a manner similar to a private business, include water, wastewater, solid waste, airport, parking, golf and waterfront.

Santa Barbara Public Financing Authority
The Santa Barbara Public Financing Authority was formed on April 1, 2002, by a joint powers agreement between the City of Santa Barbara and the Redevelopment Agency of the City of Santa Barbara. It was created to acquire and finance the acquisition of public capital improvements necessary or convenient for the operation of the City or Agency. The Santa Barbara Public Financing Authority did not have any activity during the fiscal year and is considered a blended component unit of the City. Separate financial statements are not prepared for the Authority.

Redevelopment Agency of the City of Santa Barbara
The Redevelopment Agency of the City of Santa Barbara (Agency) was established in 1968 with the broad authority to acquire, rehabilitate, develop, administer, and sell or lease property in a “Redevelopment Area.” It was formerly a separate governmental entity as prescribed in the State of California’s Community Redevelopment law as set forth in the State’s Health and Safety Code. However, 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, effective January 31, 2012. The Bill provided 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. Also upon dissolution, the City Council elected to retain the housing assets, functions and powers previously performed by the Agency. The housing assets retained by the City are reported in the Affordable Housing Special Revenue Fund.

CITY OF SANTA BARBARA

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
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NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) A. Description of the Financial Reporting Entity (Continued) Redevelopment Agency of the City of Santa Barbara (Continued) The Successor Agency was created to serve as a custodian for all other assets and to wind down the affairs of the former Agency. The Successor Agency is a separate entity of the City, subject to the direction of an Oversight Board. The Oversight Board is comprised of seven-member representatives from local government bodies. In general, the Successor Agency’s assets can only be used to pay for enforceable obligations in existence at the date of dissolution. In future fiscal years, the Successor Agency will only be allocated revenue in the amount necessary to pay the estimated payments on enforceable obligations of the former Agency until all enforceable obligations of the former Agency have been paid in full and assets have been liquidated and was dissolved in fiscal year 2020-2021. Based upon the nature of the Successor Agency’s custodial role, it is reported in a fiduciary fund (private-purpose trust fund).

B. Government-Wide and Fund Financial Statements
The government-wide financial statements (i.e., the statement of net position and the statement of changes in net position) report information on all of the nonfiduciary activities of the primary government and its component units. All fiduciary activities are reported only in the fund financial statements. For the most part, the effect of interfund activity has been removed from these statements. 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 fees and charges for support.

The statement of activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenues. Direct expenses are those that are clearly identifiable with 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 properly included among program revenues are reported instead as general revenues.

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 as separate columns in the fund financial statements. All remaining governmental and enterprise funds are separately aggregated and reported as nonmajor funds.

CITY OF SANTA BARBARA

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
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NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) B. Government-Wide and Fund Financial Statements (Continued) Governmental Fund Financial Statements include a Balance Sheet and a Statement of Revenues, Expenditures, and Changes in Fund Balances for all major governmental funds and nonmajor funds aggregated. An accompanying schedule is presented to reconcile and explain the differences in net position (i.e., fund balances) as presented in these statements to the net position presented in the Government-wide financial statements.

Proprietary Fund Financial Statements include a Statement of Net Position, a Statement of Revenues, Expenses, and Changes in Fund Net Position, and a Statement of Cash Flows for each proprietary fund and nonmajor funds aggregated. A column representing internal service funds is also presented in these statements. However, a portion of the internal service balances and activities have been combined with the governmental activities in the Government-wide financial statements.

The following are the major governmental funds of the City:

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

The Affordable Housing Fund accounts for affordable housing financial activity of the City. This includes monitoring low and moderate income housing covenants and accounting for payments on outstanding housing loans. Revenues are derived from principal and interest payments made by loan recipients.

The following are the major proprietary funds of the City:

The Water Fund accounts for the provisions of water services to the residents of the City and some residents of the County.

The Wastewater Fund accounts for the provision of sewer services to the residents of the City and some residents of the County.

The Airport Fund accounts for the operation of the municipal airport and the administration of leases of airport property.

The Waterfront Fund accounts for the operation of the City managed waterfront that includes a public wharf, a small craft harbor, and parking facilities.

The Solid Waste Fund accounts for refuse revenues received from customers, payments remitted to the trash hauler, and franchise and recycling fees paid by hauler that are used for recycling programs in the City.

CITY OF SANTA BARBARA

NOTES TO BASIC FINANCIAL STATEMENTS
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NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) B. Government-Wide and Fund Financial Statements (Continued) Additionally, the City reports the following fund types:

Governmental Fund Types
Special Revenue Funds account for the proceeds of specific revenue sources (other than special assessments or major capital projects), that are restricted to expenditures for special purposes.

Capital Projects Funds account for financial resources to be used for the acquisition or construction of major facilities other than those financed by Proprietary Funds.

Proprietary Funds
Internal Service Funds account for (1) a maintenance facility for fleet and motor pool equipment used by all City departments, (2) intra-city service building maintenance operations, (3) information systems and computer support services, (4) selfinsurance operations of workers’ compensation, unemployment, and general liability insurance coverage, (5) postemployment health insurance and other benefits for City employees at retirement, and (6) energy management coordination for all City operations.

Fiduciary Funds
Private Purpose Trust Fund is used to account for monies held on behalf of others in a fiduciary capacity, typically pursuant to a formal trust agreement. The City uses a private purpose trust fund to account for the Successor Agency of the Former Redevelopment Agency which was dissolved on January 31, 2012, pursuant to state law. All resources of the fund, including any earnings on invested resources, may be used to support this activity. There is no requirement that any portion of these resources be preserved as capital.

Custodial Funds are used to account for resources held by the City in a purely custodial capacity. Custodial funds typically involve only the receipt, temporary investment, and remittance of fiduciary resources to individuals, private organizations, or other governments. The custodial funds account for (1) moneys received from agencies for low and moderate income applicant’s rehabilitation housing loans, (2) moneys received from agencies for the California Law Enforcement Tracking System (CLETS), and (3) financial activities of the Seismic Assessment District #1.

CITY OF SANTA BARBARA

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NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) C. Measurement Focus and Basis of Accounting
The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as is the proprietary fund and fiduciary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows.

Nonexchange transactions, in which the City gives (or receives) value without directly receiving (or giving) equal value in exchange, include property and sales taxes, grants, entitlements and donations. On an accrual basis, revenue from property taxes is recognized in the fiscal year for which the taxes are levied. Revenues from sales tax are recognized when the underlying transactions take place. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the granting agency have been met.

Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the City considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Grant funds and sales taxes earned but not received by the end of the fiscal period are recorded as a receivable, and revenue is recognized if collected within 90 days of the end of the current fiscal period. All other revenue items are considered to be measurable and available only when cash is received by the government. 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.

Proprietary, private-purpose trust funds, and custodial funds are reported using the economic resources measurement focus and the accrual basis of accounting.

D. New Accounting Pronouncements
In June 2017, the Governmental Accounting Standards Board (GASB) issued GASB Statement No. 87, Leases. This standard requires the recognition of certain lease assets and liabilities for leases that previously were classified as operating leases and as inflows of resources or outflows of resources recognized based on the payment provisions of the contract. It establishes a single model for lease accounting based on the foundational principle that leases are financings of the right to use an underlying asset. Under this standard, a lessee is required to recognize a lease liability and an intangible right-to-use lease asset, and a lessor is required to recognize a lease receivable and a deferred inflow of resources.

The City adopted the requirements of the guidance effective July 1, 2021 and has applied the provisions of this standard to the beginning of the period of adoption.

CITY OF SANTA BARBARA

NOTES TO BASIC FINANCIAL STATEMENTS
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NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) E. Interfund Activities
Certain eliminations have been made as prescribed by GASB Statement No. 34 in regard to interfund activities, payables and receivables. All internal balances in the Statement of Net Position have been eliminated except those representing balances between the governmental activities and the business-type activities, which are presented as internal balances and eliminated in the total government column. In the statement of activities, internal services funds transactions have been eliminated.

However, transactions between governmental and business-type activities have not been eliminated. The following interfund activities have been eliminated: Due to and from other funds, Advances to and from other funds, and Transfers in and out.

F. Description of Program Revenue
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 are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes.

G. Definition of Operating and Nonoperating Revenues and Expenses Proprietary fund operating revenues, such as charges for services, result from exchange transactions associated with the principal activity of the fund. Exchange transactions are those in which each party receives and gives up essentially equal values. Nonoperating revenues, such as subsidies and investment earnings, result from nonexchange transactions or ancillary activities. The principal operating revenues of the water, wastewater, solid waste, clean energy, parking, golf, airport and waterfront enterprise funds and the City’s internal service funds are charges to customers for sales and services. The enterprise funds also recognize as operating revenue service charges, leases and rents, and other revenue. Operating expenses for enterprise funds and internal service funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenue and expenses not meeting this definition are reported as nonoperating revenues and expenses.

H. Flow Assumption for Restricted Resources
When both restricted and unrestricted resources are available for use, it is the City’s policy for all fund types to use restricted resources first, and then unrestricted resources as they are needed.

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NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) I. Property Tax Calendar
In 1978, a State constitutional amendment (Article XIIIA) provided that the ad valorem real property tax rate be limited to 1% of market value and be levied only by the county and shared with all other jurisdictions. The County of Santa Barbara collects the property taxes and distributes them to taxing jurisdictions on the basis of the taxing jurisdictions’ assessed valuations, subject to adjustments for voter approved debt.

Property taxes are formally due on November 1 and February 1 and become delinquent as of December 10 and April 10, respectively. Taxes become a lien on the property effective March 1 of the preceding year.

The City is a participant of the County’s Teeter plan, which means the City would receive the full amount of tax due regardless of the amount actually collected. The County would assume the risk associated with collecting all existing and future past due property tax balances.

J. Cash and Cash Equivalents
Cash and cash equivalents are considered to be cash on hand, demand deposits and investments with original maturities of three months or less from the date of acquisition.

With respect to cash and investments with fiscal agents, all investments have an original maturity of less than three months and are considered to be cash equivalents.

The City’s proprietary fund participates in the pooling of City-wide cash and investments.

Amounts held in the City pool are available to the fund on demand and are considered to be cash and cash equivalents for statement of cash flow purposes. Investments not held in the City pool that are short-term investments with original maturities of three months or less from the date of acquisition are considered cash and cash equivalents.

K. Investment Policies
Effective July 1, 1997, the City adopted the provisions of GASB Statement 31, Accounting and Financial Reporting for Certain Investments and External Investments Pools, as amended by GASB 72, which requires that governmental entities, including governmental external investment pools, report certain investments at fair value in the balance sheet and recognize the corresponding change in the fair value of investments in the year in which the change occurred.

The fair value of pooled investments is determined annually and is based on current market prices received from the City’s securities custodian. The Local Agency Investment Fund (LAIF) is required to invest in accordance with State statutes.

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NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) K. Investment Policies (Continued)
The City has developed a formal investment policy that is more restrictive than the State of California Government Code. The policy is adopted annually by the City Council.

L. Receivables and Payables
Interfund transactions are reflected as either: loans, services, reimbursements or transfers. Loans are reported as receivables and payables as appropriate, are subject to elimination upon consolidation and 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 noncurrent portion of interfund loans). Any residual balances outstanding between the governmental activities and the business-type activities are reported in the governmentwide financial statements as “internal balances.” Services provided, deemed to be at market or near market rates, are treated as revenues and expenditures/expenses. Reimbursements occur when one fund incurs a cost, charges the appropriate benefiting fund and reduces its related cost as a reimbursement. All other interfund transactions are treated as transfers. Transfers between governmental or proprietary funds are netted as part of the reconciliation to the government-wide presentation.

Loans receivable in the governmental funds include the Affordable Housing Fund, Community Development Block Grant loans, Home Investment Partnership loans, Water fund loans and Employee Mortgages.

All accounts receivables are shown net of an allowance for uncollectible amounts, including water, wastewater, airport waterfront, solid waste, golf and parking. The allowance is estimated based on historical collections and a review of accounts receivable in light of unprecedented impacts of the COVID-19 Pandemic on the global, national, state and local economy.

M. Inventories and Prepaid Assets
Inventories are stated at cost (first-in, first-out basis) and lower of average cost or market for proprietary funds. Governmental fund inventories are recorded as expenditures when consumed rather than when purchased. Proprietary fund inventories consist primarily of materials and supplies held for consumption. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in government-wide and fund financial statements.

CITY OF SANTA BARBARA

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NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) N. Capital Assets
Capital assets which include land, buildings, improvements to buildings, improvements other than buildings, equipment, construction in progress, and infrastructure (e.g., roads, bridges, and similar items), are reported in the applicable governmental or business-type activities columns in the government-wide basic financial statements. Capital assets are defined by the City as assets with an estimated useful life in excess of one year and an initial individual cost of $25,000 or more for equipment and other improvements, $100,000 or more for building improvements and infrastructure, and all buildings, regardless of cost. Such assets are recorded at historical cost or estimated historical cost if actual cost is not available. Donated capital assets are recorded at acquisition value at the date of donation.

The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend the asset’s life are charged to operations when incurred. Betterments and major improvements, which significantly increase values, change capacities or extend useful lives, are capitalized. Upon sale or retirement of capital assets, the cost and related accumulated depreciation are removed from the respective accounts and any resulting gain or loss is included in results of operations. Major outlays for capital assets and improvements are capitalized as projects are constructed.

Capital assets (except land, works of art and construction in progress) of the primary government are depreciated using the straight-line method using the estimated useful lives listed below.

Buildings 40 to 50 Years
Building Improvements 40 to 50 Years
Improvements other than Buildings 25 to 50 Years
Equipment 5 to 20 Years
Infrastructure (Except for the Maintained
Pavement Subsystem) 10 to 100 Years
The City has networks of infrastructure assets such as roads, water and wastewater treatment plants, drainage systems and sidewalks. The streets pavement subsystem of the road network is reported using the modified approach. The City has established a pavement condition assessment process. Approximately one-third of the entire subsystem is assessed on a rotating basis every two years so that the entire street network is inspected every six years. Each road segment is inspected and the Pavement Condition Index (PCI) value from zero to one hundred (0-100) is calculated for each road segment. PCI’s of 71 to 100 are considered “Good/Excellent,” PCI’s from 51 to 70 are considered “At Risk,” PCI’s from 25 to 50 are considered “Poor,” and PCI’s from 0 to 24 are considered “Very Poor/Failed.” Accordingly, depreciation is not reported for this subsystem and all costs, except for betterments and major improvements made to the subsystem, are expensed rather than capitalized.

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NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) O. Deferred Outflows and Inflows of Resources
Pursuant to GASB Statement No. 63 and GASB Statement No. 65, the City recognizes deferred outflows and inflows of resources. A deferred outflow of resources represents a consumption of nets assets that applies to future periods. A deferred inflow of resources represents an acquisition of net assets that applies to future periods. Refer to Note 10 and Note 4 for a detailed listing of the deferred outflows and deferred inflows of resources the City has recognized.

P. Compensated Absences
It is the City’s policy to permit employees to accumulate earned but unused vacation and sick pay benefits. For fire safety employees the value of the sick pay benefit is converted to additional years of service for purposes of calculating retirement benefits provided by the Public Employees Retirement System (PERS) and the employee is, therefore, compensated through an increased retirement benefit. All other employees upon retirement and with a minimum of 500 hours of accumulated sick pay benefits may elect to have an annuity or the cash value of an annuity for the value of those accumulated hours, calculated based on comparable actuarial assumptions used by PERS.

Governmental funds recognize the cost of vacation and sick pay benefits when payments are made to employees. The City has determined that 90% of the liability for compensated absences in both the governmental activities and the business-type activities at June 30, 2022, is deemed current and expected to be paid within the next 12 months with current financial resources.

The compensated absences for governmental funds will generally be liquidated through the general fund. The balances in the proprietary funds will generally be liquidated through the individual funds.

Q. Long-Term Obligations
In the government-wide financial statements, and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net position. Bond premiums and discounts, and gains and losses on defeasance, are deferred and amortized over the life of the bonds using the bondsoutstanding method, which approximates the effective interest method.

CITY OF SANTA BARBARA

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NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Q. Long-Term Obligations (Continued)
In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs and gains and losses on defeasance, during the current period. The proceeds of long-term debt issued are reported as “other financing sources.” Bonds payable are reported net of the applicable bond premium or discount and gains and losses on refunding. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures.

Premiums received on debt issuances are reported as “other financing sources” while discounts are reported as “other financing uses.”
R. Leases
Lessee
The City is a lessee for noncancellable leases of property and equipment. The City recognizes a lease liability and a right to use lease asset (lease asset) in the applicable governmental activities or business-type activities in the government wide and in the proprietary fund financial statements. The City recognizes lease liabilities with an initial, individual value of $25,000 or more for equipment and no threshold for real estate.

At the commencement of a lease, the City initially measures the lease liability at the present value of payments expected to be made during the lease term. Subsequently, the lease liability is reduced by the principal portion of lease payments made. The lease asset is initially measured as the initial amount of the lease liability, adjusted for lease payments made at or before the lease commencement date, plus certain initial direct costs. Subsequently, the lease asset is amortized on a straight line basis over its useful life.

Key estimates and judgments related to leases include how the City determines (1) the discount rate it uses to discount the expected lease payments to present value, (2) lease term, and (3) lease payments.

The City uses the interest rate charged by the lessor as the discount rate. When the interest rate charged by the lessor is not provided, the City generally uses its estimated incremental borrowing rate as the discount rate for leases.

The lease term includes the noncancellable period of the lease.

Lease payments included in the measurement of the lease liability are composed of fixed payments and the purchase option price that the City is reasonably certain to exercise.

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NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) R. Leases (Continued)
Lessee (Continued)
The City monitors changes in circumstances that would require a remeasurement of its lease and will remeasure the lease asset and liability if certain changes occur that are expected to significantly affect the amount of the lease liability.

Lease assets are reported with other capital assets and lease liabilities are reported with long term debt on the statement of net position.

Lessor
The City is a lessor for noncancellable leases of buildings and land. The City recognizes a lease receivable and a deferred inflow of resources in the governmental activities in the government wide and in the general fund financial statements.

At the commencement of a lease, the City initially measures the lease receivable at the present value of payments expected to be received during the lease term. Subsequently, the lease receivable is reduced by the principal portion of lease payments received. The deferred inflow of resources is initially measured as the initial amount of the lease receivable, adjusted for lease payments received at or before the lease commencement date. Subsequently, the deferred inflow of resources is recognized as revenue over the life of the lease term.

Key estimates and judgments include how the City determines (1) the discount rate it uses to discount the expected lease receipts to present value, (2) lease term, and (3) lease receipts.

The City uses its estimated incremental borrowing rate as the discount rate for leases.

The lease term includes the noncancellable period of the lease.

Lease receipts included in the measurement of the lease receivable are composed of fixed payments from the lessee.

The City monitors changes in circumstances that would require a remeasurement of its lease and will remeasure the lease receivable and deferred inflows of resources if certain changes occur that are expected to significantly affect the amount of the lease receivable.

S. Net Pension Liability
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 and are in accordance with the implementation of GASB Statement No, 68. Investments are reported at fair value. CalPERS audited financial statements are publicly available reports that can be obtained at CalPERS’s website under Forms and Publications.

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NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) T. Other Postemployment Benefits
For purposes of measuring the liability, deferred outflows of resources and deferred inflows of resources, and expense associated with the City’s plan, have been determined by an independent actuary in accordance with GASB Statement No. 75.

U. Restricted Assets
The City has funds held by trustees or fiscal agents pledged to the payment or security of bonds and certificates of participation and are classified as restricted assets on the balance sheet because they are maintained in separate bank accounts and their use is limited by applicable bond covenants. The California Government Code provides that these funds, in absence of specific statutory provisions governing the issuance of bonds or certificates, may be invested in accordance with the ordinance, resolutions, or indentures specifying the types of investments the trustees or fiscal agents may make.

V. Allocated Costs Policy
Expenses reported for functional activities include allocated indirect expenses pursuant to a cost allocation plan.

W. Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimates.

NOTE 2 DEPOSITS AND INVESTMENTS
Cash and investments as of June 30, 2022, are classified in the accompanying financial statements as follows:

Statement of Net Position:

Cash and Investments 324,147,954 $
Cash and Investments with Fiscal Agents 3,383,546
Fiduciary Funds:

Cash and Investments 487,961
Total Cash and Investments 328,019,461 $
Cash on Hand 30,035 $
Demand Deposit Accounts with Financial Institutions 46,805,574 Investments 281,183,852
Total Cash and Investments 328,019,461 $
All of the City’s deposits, except certain cash balances held by fiscal agents, are entirely insured or collateralized.

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NOTE 2 DEPOSITS 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 for the City by the California Government Code (or the City’s investment policy, where more restrictive). The table also identifies certain provisions of the California Government Code (or the City’s investment policy, where more restrictive) that address interest rate risk, credit risk, and concentration of credit risk. This table does not address investments of debt proceeds held by trustees/fiscal agents that are governed by the provisions of debt agreements of the City, rather than the general provisions of the California Government Code or the City’s investment policy.

Maximum Maximum
Maximum Percent of Investment
Authorized Investment Type Maturity Portfolio* in One Issuer Local Agency Bonds 5 Years None None
U.S. Treasury Obligations 5 Years None None
U.S. Agency Securities 5 Years None None
State of California/Local Agency Obligations 5 Years None None Banker’s Acceptances 180 Days 40% 10%
Commercial Paper 270 Days 25% 10%
Negotiable Certificates of Deposit 5 Years 15% 3%
Repurchase Agreements 1 Year None None
Reverse Repurchase Agreements 92 Days 20% None
Medium-Term Notes 5 Years 30% 5%
Supranational Obligations 5 Years 30% None
Public Bank Obligations 5 Years None None
U.S. Government Money Market Funds N/A 20% 10%
Bank/Time Deposits/Non-Negotiable CDs 5 Years None None State Investment Pool (LAIF) N/A $75 million* N/A
* Excluding amounts held by trustees/fiscal agents that are not subject to California Government Code restrictions.

Investments Authorized by Debt Agreements
Investment of debt proceeds held by trustees/fiscal agents 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 authorized for investments held by trustees/fiscal agents. The table also identifies certain provisions of these debt agreements that address interest rate risk, credit risk, and concentration of credit risk.

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NOTE 2 DEPOSITS AND INVESTMENTS (CONTINUED)
Investments Authorized by Debt Agreements (Continued)
Maximum Maximum
Maximum Percent of Investment
Authorized Investment Type Maturity Portfolio in One Issuer U.S. Treasury Obligations None None None
U.S. Agency Securities None None None
Banker’s Acceptances 180 Days None None
Commercial Paper 270 Days None None
Money Market Mutual Funds N/A None None
Investment Contracts 30 Years None None
State Investment Pool (LAIF) N/A None None
Disclosures Relating to 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 is, the greater the sensitivity its fair value will be to changes in market interest rates. In accordance with its investment policy, the City manages its exposure to declines in fair value by limiting the weighted average maturity of the overall investment portfolio to 2½ years. In addition, the City employs a “buy and hold” investment strategy whereby investments are held to maturity at which time the investment is redeemed at par. This strategy limits the City’s exposure to declines in fair value to unforeseen emergencies when the need for cash beyond that which is planned and anticipated may arise.

Portfolio diversification is also employed as a way to control risk, including those associated with market changes or issuer default. To control market price risks, volatile investments are avoided, and to control risks of illiquidity, a minimum of 10% of the total portfolio is held in highly marketable U.S. Treasury Bills and Notes and/or the State of California Local Agency Investment Fund (LAIF) and/or Money Market Funds and/or securities maturing within 90 days.

WeightedAverage
Authorized Investment Type Fair Value Maturity
U.S. Treasury Notes 53,186,120 $ .5 Years
U.S. Agency Securities 121,824,450 1.3 Years
Corporate Medium Term Notes 16,548,920 .1 Years
Supranational Obligations 12,206,410 .1 Years
State Investment Pool (LAIF) 74,034,406 N/A
Held by Trustees/Fiscal Agents:

Money Market Fund 2,374,021 N/A
Investment Contracts 1,009,525 N/A
Total 281,183,852 $

CITY OF SANTA BARBARA

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
(69)
NOTE 2 DEPOSITS AND INVESTMENTS (CONTINUED)
Fair Value Measurements
The City adopted GASB Statement No. 72, Fair Value Measurement and Application, as of July 1, 2015. GASB Statement No. 72 establishes general principles for measuring fair value and standards of accounting and financial reporting for assets and liabilities measured at fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets. Level 2 inputs are significant other observable inputs. Level 3 inputs are significant unobservable inputs.

United States Treasury Notes, United States Government – Sponsored Agency securities, corporate medium-term notes, and negotiable certificates of deposit are classified in Level 2 of the fair value hierarchy and are valued using a matrix pricing technique. Matrix pricing is used to value securities based on the securities’ relationship to benchmark quoted prices.

Investment Type June 30, 2022 Level 1 Level 2 Level 3
U.S. Treasury Notes 53,186,120 $ - $ 53,186,120 $ - $
U.S. Agency Securities 121,824,450 - 121,824,450 -
Corporate Medium-Term Notes 16,548,920 - 16,548,920 -
Supranational Obligations 12,206,410 - 12,206,410 -
Total Investments at Fair Value 203,765,900 - $ 203,765,900 $ - $ Investments at Amortized Cost
Held by Trustees/Fiscal Agents:

Money Market Funds 2,374,021
Investment Contracts 1,009,525
Subtotal 3,383,546
Investments not Subject to Hierarchy
State Investment Pool (LAIF) 74,034,406
Total Investments 281,183,852 $

CITY OF SANTA BARBARA

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
(70)
NOTE 2 DEPOSITS AND INVESTMENTS (CONTINUED)
Disclosures Relating to Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below is the minimum rating required by (where applicable) the California Government Code, the City’s investment policy, or debt agreements, and the actual rating as reported by Standard & Poor’s or Moody’s, as of yearend for each investment type:

Fair Value Min. Legal Not Required
Investment Type of Investment Rating To be Rated AAA/Aaa AA+ AA A+ Unrated U.S. Treasury Notes 53,186,120 $ N/A 53,186,120 $ - $ - $ - $ - $ - $ U.S. Agency Securities 121,824,450 N/A - 121,824,450 - - - - Corporate Medium-Term Notes 16,548,920 A - 1,980,280 6,657,300 1,999,780 5,911,560 - Supranational Obligations 12,206,410 N/A - 12,206,410 - - - - Local Agency Investment Pool (LAIF) 74,034,406 N/A - - - - - 74,034,406 Held by Trustees/Fiscal Agents:

Money Market 2,374,021 N/A - 2,374,021 - - - -
Investment Contracts 1,009,525 N/A - - - - - 1,009,525 Total 281,183,852 $ 53,186,120 $ 138,385,161 $ 6,657,300 $ 1,999,780 $ 5,911,560 $ 75,043,931 $ Rating as of Year-End
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 that represent 5% or more of total City’s investments are as follows:

Percent

20.1%

18.9%

9.5%

6.9%
Investment Type
U.S. Agency Securities
U.S. Treasury Securities
Reported Amount
$ 56,588,140
53,186,120
Federal Home Loan Mortgage Corp. U.S. Agency Securities 19,399,680 Issuer
Federal Home Loan Bank
U.S. Treasury Notes
Federal Farm Credit Bank U.S. Agency Securities 26,686,090 Disclosure Risk Relating to 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. The California Government Code and the City’s investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits or investments, other than the following provision for deposits: The California Government Code requires that a financial institution secure deposits made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the governmental unit). The 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.

CITY OF SANTA BARBARA

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
(71)
NOTE 2 DEPOSITS AND INVESTMENTS (CONTINUED)
Disclosure Risk Relating to Custodial Credit Risk (Continued) GASB Statement No. 40 requires that the following disclosure be made with respect to custodial credit risks relating to deposits and investments: none of the City’s deposits with financial institutions in excess of federal depository insurance limits were held in uncollateralized accounts. As of June 30, 2022, the deposits were collateralized in accordance with Section 53652 of the California Government Code by the pledging financial institution in the City’s name.

Investment in State Investment Pool
The City is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the state of California. The fair value of the City’s investment in this pool is reported in the accompanying financial statements at amounts based upon the City’s prorata share of the fair value provided by LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis.

NOTE 3 UNEARNED REVENUE
Under both the accrual and modified accrual basis of accounting, revenue may be recognized only when earned. Therefore, the government-wide statement of net position, as well as governmental and proprietary funds, defers revenue recognition in connection with resources that have been received as of year-end, but not yet earned. Assets recognized in connection with a transaction before the earnings process is complete are offset by a corresponding liability for unearned revenue.

At June 30, 2022, the various components of unearned revenue reported are as follows:

Unearned
Governmental Funds:

General Fund:

Deferred Business License Tax 1,349,070 $
Advance on Library Grant Funding 5,669,732
Prepaid Parks and Recreation Fees 2,091,253
Subtotal 9,110,055
Other Governmental Funds:

Streets Grants Capital Fund:

Advance on Transportation Grant Funding 805,853
Miscellaneous Grants Fund:

Advance on Library Grant Funding 128,470
FEMA Reimbursement Fund:

Advance on FEMA Grant Funding 21,584
Subtotal 955,907
Total Governmental Funds 10,065,962 $

CITY OF SANTA BARBARA

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
(72)
NOTE 3 UNEARNED REVENUE (CONTINUED)
Unearned
Business-Type Activities:

Water Fund:

Joint Venture Agreement 4,360,334 $
Waterfront Fund:

Advance on State Grant Funding 12,752
Prepaid Lease and Slipholder Revenue 215,052
Solid Waste Fund:

Advance on State Grant Funding 132,171
Golf Course Fund:

Golf Gift Cards and Credit Vouchers 152,158
Internal Service Fund (Energy Management):

Advance on Energy Funding 78,600
Total Business-Type Activities 4,951,067 $
NOTE 4 DEFERRED OUTFLOWS OF RESOURCES
Pursuant to GASB Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position, and GASB Statement No. 65, Items Previously Reported as Assets and Liabilities, the City recognized deferred outflows of resources in the entity-wide and proprietary fund statements. This item represents a consumption of net assets that applies to future periods. Previous financial reporting standards do not include guidance for reporting those financial statement elements, which are distinct from assets and liabilities.

Deferred outflows of resources balances as reported on the statement of net position for the year ended June 30, 2022, were as follows:

Balance
June 30, 2022
Governmental Activities
Deferred Pension-Related Items 46,534,651 $
Deferred OPEB-Related Items 12,943,283
Total 59,477,934 $
Business-Type Activities
Deferred Loss on Refunding - 2013 Water Certificates of Participation 324,482 $ Deferred Loss on Refunding - 2014 Waterfront Refunding Revenue Bonds 239,421 Deferred Loss on Refunding - 2016 Wastewater Revenue Refunding Bonds 57,311 Deferred Loss on Refunding - 2019 Airport Revenue Refunding Bonds 557,090 Deferred Pension-Related Items 8,423,108
Total 9,601,412 $

CITY OF SANTA BARBARA

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
(73)
NOTE 4 DEFERRED OUTFLOWS OF RESOURCES (CONTINUED)
Gains and losses related to changes in net pension liability and total OPEB liability are recognized systematically over time. Amounts are first recognized in pension and 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 pension or OPEB and are to be recognized in future pension and OPEB expense. The recognition period differs based on the source of the gain or loss. For the net difference between the projected and actual earnings on plan investments it is five years. All other amounts are recognized over the expected average remaining service lifetime.

A deferred charge on refunding results from the difference in the carrying value of refunded debt and its reacquisition price. This amount is deferred and amortized over the shorter of the life of the refunded or refunding debt.

NOTE 5 CAPITAL ASSETS
Governmental Activities
Capital asset activity for the year ended June 30, 2022, was as follows:

Beginning
Balance Ending
July 1, 2021 Transfers/ Balance
As Restated Increases Reclassifications Decreases June 30, 2022 Governmental Activities
Nondepreciating Capital Assets:

Construction in Progress 36,015,192 $ 23,414,506 $ (31,867,177) $ (77,328) $ 27,485,193 $ Art and Historical Treasures 1,758,893 - - - 1,758,893 Land 51,160,364 - - - 51,160,364 Streets 160,101,178 - - - 160,101,178 Total Nondepreciating Capital Assets 249,035,627 23,414,506 (31,867,177) (77,328) 240,505,628 Depreciating Capital Assets:

Buildings 26,367,192 - - - 26,367,192 Building Improvements 42,392,890 144,663 10,280,985 - 52,818,538 Improvements Other than Buildings 63,843,391 1,821,905 18,074,131 - 83,739,427 Equipment 47,157,627 1,379,928 375,783 (672,260) 48,241,078 Infrastructure 260,001,311 905,485 3,136,278 - 264,043,074 Right to Use Assets 2,306,320 - - - 2,306,320 Total Depreciating Capital Assets 442,068,731 4,251,981 31,867,177 (672,260) 477,515,629 Less Accumulated Depreciation:

Buildings 16,506,867 447,434 - - 16,954,301 Building Improvements 9,345,245 1,184,842 - - 10,530,087 Improvements Other than Buildings 29,913,555 2,173,117 - - 32,086,672 Equipment 35,210,418 2,539,674 - (672,260) 37,077,832 Infrastructure 95,987,269 4,829,138 - - 100,816,407 Right to Use Assets - 370,962 370,962 Total Accumulated Depreciation 186,963,354 11,545,167 - (672,260) 197,836,261 Total Capital Assets Being Depreciated, Net 255,105,377 (7,293,186) 31,867,177 - 279,679,368 Governmental Activities Capital Assets, Net 504,141,004 $ 16,121,320 $ - $ (77,328) $ 520,184,996 $

CITY OF SANTA BARBARA

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
(74)
NOTE 5 CAPITAL ASSETS (CONTINUED)
Governmental Activities (Continued)
Depreciation expense was charged to functions/programs of the governmental activities as follows:

Governmental Activities:

Administration 124,478 $
Public Safety 564,677
Public Works 6,034,155
Community Services 1,617,328
Community Development 842,559
Subtotal 9,183,197
Capital assets held by the city’s internal service funds are charged to the various functions based on
usage of the assets 2,361,970
Total Depreciation Expense - Governmental Activities 11,545,167 $ Business-Type Activities
Beginning
Balance Ending
July 1, 2021 Transfers/ Balance
As Restated Increases Reclassifications Decreases June 30, 2022 Business-Type Activities:

Nondepreciating Capital Assets:

Land 24,944,374 $ - $ - $ - $ 24,944,374 $
Construction in Progress 8,509,528 16,605,182 (2,285,128) 22,699,195 (130,387) Total Nondepreciating Capital Assets 33,453,902 16,605,182 (2,285,128) 47,643,569 (130,387) Depreciating Capital Assets:

Buildings 136,167,323 - - - 136,167,323 Building Improvements 13,277,586 - 224,338 - 13,501,924 Improvements Other than Buildings 464,640,575 728,969 738,388 - 466,107,932 Equipment 59,940,241 272,737 1,322,402 - 61,535,380 Underground Piping 5,767,386 226,169,091 - - 231,936,477 Infrastructure 193,683,396 - - - 193,683,396 Right to Use Assets 222,042 - - - 222,042 Total Depreciating Capital Assets 1,094,100,254 6,769,092 2,285,128 - 1,103,154,474 Less Accumulated Depreciation:

Buildings 49,707,718 2,333,806 - - 52,041,524 Building Improvements 5,571,808 307,514 - - 5,879,322 Improvements Other than Buildings 274,811,264 9,716,660 - - 284,527,924 Equipment 46,484,858 2,559,767 - - 49,044,625 Underground Piping 5,303,026 142,391,381 - - 147,694,407 Infrastructure 28,242,787 4,655,018 - - 32,897,805 Right to Use Assets - 60,755 - - 60,755 Total Accumulated Depreciation 547,209,816 24,936,546 - - 572,146,362 Total Capital Assets Being Depreciated, Net 546,890,438 2,285,128 (18,167,454) - 531,008,112 Business-Type Activities Capital Assets, Net 580,344,340 $ (1,562,272) $ - $ (130,387) $ 578,651,681 $

CITY OF SANTA BARBARA

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
(75)
NOTE 5 CAPITAL ASSETS (CONTINUED)
Business-Type Activities (Continued)
Depreciation expense was charged to functions/programs of the business-type activities as follows:

Business-Type Activities:

Water 9,902,849 $
Wastewater 5,295,858
Airport 6,678,480
Waterfront 1,572,809
Downtown Parking 1,237,273
Golf 249,277
Total Depreciation Expense - Business-Type Activities 24,936,546 $ NOTE 6 INTERFUND RECEIVABLES, PAYABLES, AND TRANSFERS
The composition of interfund balances as of June 30, 2022, is as follows:

The interfund balances at June 30, 2022, are generally short-term loans to cover temporary cash deficits in various funds.

Due to/from Other Funds
Receivable Fund Payable Fund Amount
General Fund Other Governmental Funds 7,851,328 $
General Fund Internal Service Funds 2,495,496
Total 10,346,824 $
Advances to/from Other Funds
Receivable Fund Payable Fund Amount
General Fund Other Enterprise Funds 2,503,567 $
Internal Service Funds 24,140
Internal Service Fund Other Governmental Funds 2,122,416 Total 4,650,123 $
The General Fund advanced money to the Other Enterprise Funds (Golf Course Enterprise Fund). This advance, totaling $440,610 at June 30, 2022, was for the purpose of financing the Golf Safety Improvement Master Plan. The advance bears interest at 3%, with payments due annually.

The General Fund advanced money to the Other Enterprise Funds (Clean Energy Enterprise Fund). This advance, totaling $2,062,957 at June 30, 2022, was for the purpose of financing the start-up costs for the Santa Barbara Clean Energy program. The advance bears interest at the rate of 1.65%. Repayments on this advance are due to start in Fiscal Year 2023, and are to be repaid annually over a five year period.

CITY OF SANTA BARBARA

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
(76)
NOTE 6 INTERFUND RECEIVABLES, PAYABLES, AND TRANSFERS (CONTINUED) The General Fund advanced money to the Internal Service Funds (Energy Management Fund). This advance, totaling $24,140 at June 30, 2022, was for the purpose of financing energy efficiency projects. The advance bears interest at 0%, and has payments due annually.

The Internal Service Fund (Vehicle Capital Fund) advanced money to the Other Governmental Funds (Measure C Capital Projects Fund). This advance, totaling $2,122,416 at June 30, 2022, was for the purpose of financing the Cabrillo Pavilion project. The advance bears interest at 2%, and has payments due annually.

A summary of interfund transfers during the year follows:

Affordable Other Water Wastewater Solid Waste Airport Waterfront Other General Housing Governmental Enterprise Enterprise Enterprise Enterprise Enterprise Enterprise Internal Transfers Out Fund Fund Funds Fund Fund Fund Fund Fund Funds Service Total Governmental Funds:

General Fund - $ - $ 31,814,026 $ 203,701 $ 135,537 $ 20,239 $ 146,443 $ 128,603 $ 2,303,540 $ 742,592 $ 35,494,681 $ Other Govt Funds 710,321 8,674 8,185,814 - - - - - 5,644 86,340 8,996,793 Enterprise Funds:

Water - - 146,267 - - - - - - 14,970 161,237 Wastewater - - - - - - - - - 10,216 10,216 Airport - - - - - - - - - 13,105 13,105 Waterfront - - - - - - - - - 9,414 9,414 Solid Waste 50,000 - - - - - - - - 1,946 51,946 Other Enterprise Funds - - - - - - - - - 4,675 4,675 Internal Service Funds 1,054,838 - - - - - - - - 109,173 1,164,011 Total Transfers 1,815,159 $ 8,674 $ 40,146,107 $ 203,701 $ 135,537 $ 20,239 $ 146,443 $ 128,603 $ 2,309,184 $ 992,431 $ 45,906,078 $ Transfers In
The most significant interfund transfers related to the following:

1. Transfers from the General Fund to Other Governmental Funds totaled $31.8 million.

These were primarily due to capital outlay transfers of $0.82 million to the General Capital Improvements Fund, and $30.8 million to the Measure C Capital fund for a variety of capital projects throughout the city. Notable projects included roadway, sidewalk and access ramp improvements, business corridor improvements, and design work for the development of the new Police Station. In addition, Measure C funds were spent on a pilot program to provide temporary bridge safe shelter housing services.

2. Transfers from the General Fund to the Enterprise Funds totaled $2.94 million. $2.2 million of these transfers were for grant funding received through the American Rescue Plan Act (ARPA) for eligible COVID-19 pandemic costs incurred in the enterprise funds.

The remaining non-ARPA transfers were to the Downtown Parking Fund which included $0.33 million for the downtown maintenance contract to provide landscape maintenance and sidewalk cleaning, and $0.30 million for the Downtown Ambassador Program, which provides assistance to the public in the downtown area.

CITY OF SANTA BARBARA

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
(77)
NOTE 6 INTERFUND RECEIVABLES, PAYABLES, AND TRANSFERS (CONTINUED)

3. Transfers from the General Fund to the Internal Service Funds totaled $0.74 million. The significant transfers included $0.43 million to the Self Insurance Fund to fund litigation settlement costs, $0.17 million for ARPA grant transfers for eligible COVID-19 pandemic costs incurred in the internal service funds, and a $0.13 million transfer to the Information Service Fund for telecommunication software upgrades.

4. Transfers from the Other Governmental Funds to the General Fund totaled $0.71 million.

These transfers included $0.37 million from the Streets Sweeping Fund for Police Department Street Sweeping Enforcements efforts, $0.22 million from the Traffic Safety Fund for Police Department traffic safety costs, and $0.10 million from the Asset Forfeiture Fund for Parking Enforcement Equipment.

5. Transfers between Other Governmental Funds totaled $8.2 million and were primarily comprised of the following capital outlay transfers:
a. $3.75 million from the Streets Fund to the Street Capital Improvement Fund. b. $2.2 million from the Measure A Fund to the Measure A Capital Improvements Fund for roadwork.
c. $0.1 million from the Measure A Fund, $0.45 million from the Measure A Capital Improvements Fund, and $0.1 million from the Creek Restoration Capital Fund to the Street Grant Capital Fund for the city portion of grant funded streets and bridge projects.
d. $1.03 million from the Creeks Restoration Fund to the Creek Restoration Capital Improvement Fund for various creek restoration projects. e. $0.20 million from both the Streets Operating Fund and the Creeks Restoration Fund to the Street Sweeping Fund for street sweeping operations.

6. Transfers from the Internal Service Funds to the General Fund totaled $1.05 million. This was primarily to return funds from the Vehicle Capital Fund to the General Fund for Fire Department Vehicles.

NOTE 7 LONG-TERM DEBT
The City has issued debt in the business-type activities to provide funds for the acquisition and construction of major capital facilities. The types of debt include (1) Revenue Bonds where the City pledges income derived from a business-type activity to pay debt service, (2) certificates of participation that pledge general government revenue to pay base rent payments to the Santa Barbara Public Financing Corporation for real property and improvements owned by the City, and (3) loans from other governmental agencies. Internal service funds predominantly serve the governmental funds. Accordingly, long-term liabilities for them are included as part of the totals for governmental activities. The claims liability item is generally liquidated by the self-insurance internal service fund (see Note 12).

CITY OF SANTA BARBARA

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
(78)
NOTE 7 LONG-TERM DEBT (CONTINUED)
Long-term liability activity for the year ended June 30, 2022, is as follows:

Beginning Ending Amount Due
Balance Balance Amount Due In More Than
July 1, 2021 Additions Deletions June 30, 2022 in One Year One Year Governmental Activities Other Long-Term Liabilities:

Compensated Absences 9,906,695 $ 8,554,877 $ 9,462,343 $ 8,999,229 $ 8,099,306 $ 899,923 $ Financing Agreement - 3,888,745 95,370 3,793,375 518,364 3,275,011 Claims Liability 4,908,663 18,386,428 4,971,305 18,323,786 5,555,614 12,768,172 Governmental Activity: Long-Term Liabilities 28,293,123 17,352,285 14,529,018 31,116,390 14,173,284 16,943,106 Business-Type Activities Direct Borrowings: Loans 130,600,439 - 7,815,079 122,785,360 7,990,757 114,794,603 Other Debt:

Revenue Bonds 41,066,282 - 2,850,958 38,215,324 2,967,565 35,247,759 Certificates of Participation 10,810,000 - 1,715,000 9,095,000 1,790,000 7,305,000 Unamortized Debt Premium 5,801,776 - 538,738 5,263,038 - 5,263,038 Unamortized Debt Discount - (52,193) (8,700) - (43,493) (43,493) Subtotal 188,226,304 - 12,911,075 175,315,229 12,748,322 162,566,907 Other Long-Term Liabilities:

Compensated Absences 2,629,392 2,790,710 2,511,453 2,908,649 2,613,074 295,575 Business-Type Activity: Long-Term Liabilities 190,855,696 2,790,710 15,422,528 178,223,878 15,361,396 162,862,482 Total Debt Activity 219,148,819 $ 20,142,995 $ 29,951,546 $ 209,340,268 $ 29,534,680 $ 179,805,588 $ Governmental Activities
On December 17, 2021, the City entered into a financing agreement for fire equipment for $3,888,745 at a rate of 1.2977% and matures in June of 2029.

The annual requirements to amortize all long-term debt outstanding as of June 30, 2022, are as follows:

Fiscal Year Funding Principal Interest Total
2023 518,364 $ 88,007 $ 606,371 $
2024 530,628 75,744 606,372
2025 543,217 63,156 606,373
2026 556,139 50,232 606,371
2027 569,404 36,966 606,370
2028-2032 1,075,623 32,711 1,108,334
Total $ 346,816 3,793,375 $ 4,140,191 $
Governmental Activities

CITY OF SANTA BARBARA

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
(79)
NOTE 7 LONG-TERM DEBT (CONTINUED)
Business-Type Activities
A description of long-term obligations outstanding at June 30, 2022, by category follows:

Revenue Bonds
Wastewater Fund
$10,580,000 - 2016 Sewer Revenue Refunding Bonds. Bonds were issued to provide funds in order to refund the outstanding 2004A Sewer Revenue Bonds which were used to finance the acquisition of certain capital improvements to the Wastewater system. Remaining annual principal installments range from $845,000 to $1,120,000 through May 15, 2028. Interest rates range from 4.0% to 5.0% payable semiannually. $ 5,995,000 Waterfront Fund
$12,334,392 - Waterfront Refunding Revenue Bonds, Series 2014. Bonds were issued to provide funds in order to refund the outstanding City of Santa Barbara Waterfront Revenue Refunding Certificates of Participation, Series 2002 which were used to finance capital improvements at the waterfront. Remaining annual principal installments range from $345,000 to $1,092,700 through October 1, 2027. The interest rate is 3.53%. 5,485,324
Airport Fund
$29,825,000 - 2019 Airport Revenue Refunding Bonds. Bonds were issued to provide funds in order to refund the outstanding 2009 Airport Revenue Bonds which were used to finance the construction a new passenger terminal building and related parking and roadway improvements at the Santa Barbara Municipal Airport. Annual principal installments range from $1,075,000 to $2,345,000 through April 1, 2038.

Interest rates range from 4.0% to 5.0% payable semiannually. 26,735,000
Total Revenue Bonds 38,215,324
Certificates of Participation
Water Fund
$22,680,000 - 2013 Refunding Water Certificates of Participation. Certificates issued to provide funds to refund the outstanding City of Santa Barbara 2002 Certificates, which were used to finance capital improvements to the water distribution system.

Certificates were also used to defease a California Department of Health Services Safe Drinking Water State Revolving Fund loan, which was used to finance construction of a project that enabled the City to meet safe drinking water standards.

Remaining annual principal installments range from $1,425,000 to $2,055,000 through October 1, 2026. Interest rates range from 3.0% to 5.0% payable semiannually. 9,095,000
Total Certificates of Participation 9,095,000

CITY OF SANTA BARBARA

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
(80)
NOTE 7 LONG-TERM DEBT (CONTINUED)
Business-Type Activities (Continued)
Loans Payable
Water Fund
$17,900,849 - California Department of Health Services Safe Drinking Water State Revolving Fund Loan. Funds used to assist in financing construction of a project which will enable the City to meet safe drinking water standards. Due in semiannual payments of $572,123. Interest is 2.5132% per annum. The final payment is due July 1, 2025. $ 3,286,682
$26,614,040 California Department of Health Services Safe Drinking Water State Revolving Fund Loan. Funds used to assist in financing construction of a project which will enable the City to meet safe drinking water standards. Due in semiannual payments of $849,840. Interest is 2.5017% per annum. The final payment is due July 1, 2035. 18,763,518
$80,000,000 California State Water Resources Control Board Loan. Funds used to assist in financing the desalination plant reactivation project. Due in semiannual payments of $2,104,805. Interest is 1.663% per annum. The final payment is due July 1, 2038. 58,923,683
Wastewater Fund
$1,636,487 - California State Water Resources Control Board Loan. Funds used to assist in financing a biofuel conversion project to increase energy generated at the El Estero Wastewater Treatment Plant. Due in 20 annual payments of $98,161. Interest is 1.8% per annum. The final payment is due December 31, 2036. 1,280,375
$5,200,000 - California State Water Resources Control Board Loan. Funds used to assist in financing the replacement design, modifications to the washer compactor area, replacement of water compactor units, and a study of the electrical generators use for new mechanical screens and conveyance. Due in 20 annual payments of $341,981. Interest is 2.6% per annum. The final payment is due July 31, 2033.
3,486,814
$31,388,033 - California State Water Resources Control Board Loan. Funds used to assist in financing the upgrade to the aeration system and improve the secondary treatment process at the El Estero Wastewater Treatment Plant. Due in 20 annual payments of $1,953,145. The final payment is due March 1, 2039. Interest is 1.9% per annum. 28,148,839
Airport Fund
$2,450,339 - State Department of Transportation Loan. Funds used to finance capital improvements at the airport. Due in 17 annual payments of $218,714. Interest is

5.0843% per annum. The final payment is due May 30, 2024. 406,193 Waterfront Fund
$14,501,000 - State Department of Boating and Waterways Loan. Funds used to finance capital improvements at the marina. Interest is 4.5% per annum. Due in annual payments of $889,263. The final payment is due August 1, 2037. 8,489,256 Total Loans Payable 122,785,360
Total Business-Type Activities $ 170,095,684

CITY OF SANTA BARBARA

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
(81)
NOTE 7 LONG-TERM DEBT (CONTINUED)
Business-Type Activities (Continued)
The annual requirements to amortize all long-term debt outstanding as of June 30, 2022, are as follows:

Principal Payments
Revenue Certificates of Direct Borrowings
Fiscal Year Funding Bonds Participation Other Loans Total 2023 2,967,565 $ 1,790,000 $ 7,990,757 $ 12,748,322 $
2024 3,100,102 1,865,000 8,170,948 13,136,050
2025 3,248,721 1,960,000 8,136,106 13,344,827
2026 3,396,259 2,055,000 7,164,094 12,615,353
2027 3,542,677 1,425,000 7,317,845 12,285,522
2028-2032 9,435,000 - 39,030,030 48,465,030
2033-2037 10,180,000 - 36,793,930 46,973,930
2038-2039 2,345,000 - 8,181,650 10,526,650
Total Principal 38,215,324 9,095,000 122,785,360 170,095,684 Fiscal Year Funding Interest Payments
2023 1,799,687 352,000 2,564,044 4,715,731
2024 1,665,172 269,575 2,383,853 4,318,600
2025 1,524,498 173,950 2,199,981 3,898,429
2026 1,376,897 83,850 2,027,747 3,488,494
2027 1,222,407 21,375 1,873,996 3,117,778
2028-2032 4,416,889 - 6,929,164 11,346,053
2033-2037 2,163,500 - 2,696,046 4,859,546
2038-2039 117,250 - 170,931 288,181
Total Interest 14,286,300 900,750 20,845,762 36,032,812 Total Debt 52,501,624 $ 9,995,750 $ 143,631,122 $ 206,128,496 $ Business-Type Activities
Revenue Bonds
Waterfront Refunding Revenue Bonds, Series 2014
On March 7, 2014, the City issued Waterfront Refunding Revenue Bonds, Series 2014 in the amount of $12,334,392 to refund the 2002 Waterfront Certificates of Participation. The net proceeds of $12,898,420 (less payment of $141,112 in underwriting fees, bond insurance, and other issuance costs and a net additional $581,456 contribution from the Waterfront reserve fund and $1,431,597 of 2002 COP’s reserve fund monies) were used to purchase U.S. Government securities. Those securities were deposited in an irrevocable trust with an escrow agent to provide for the full payoff of the 2002 COPs, and all future debt service payments on the advance refunding. As a result, the 2002 COP’s are considered to be defeased and the liability for those bonds has been removed from the financial statements of the Waterfront Enterprise Fund.

CITY OF SANTA BARBARA

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
(82)
NOTE 7 LONG-TERM DEBT (CONTINUED)
Business-Type Activities (Continued)
Revenue Bonds (Continued)
Sewer Revenue Refunding Bonds, Series 2016
On December 21, 2016, the City issued Sewer Revenue Refunding Bonds, Series 2016 in the amount of $10,580,000 to refund the 2004 Sewer Revenue Bonds. The net proceeds of $13,029,030 (including an original issue premium of $1,311,547, less payment of $263,572 in underwriting fees, bond insurance, and other issuance costs and a net additional $1,401,055 of 2004 Sewer Bond’s reserve fund monies) were used to purchase U.S.

Government securities. Those securities were deposited in an irrevocable trust with an escrow agent to provide for the full payoff of the 2004 Sewer Bonds, and all future debt service payments on the advance refunding. As a result, the 2004 Sewer Bonds are considered to be defeased and the liability for those bonds has been removed from the financial statements of the Wastewater Enterprise Fund.

This debt issue is subject to a reserve requirement in conjunction with nonsubordinate (parity) debt issued by the City. The City is in compliance with the revenue rate covenant requiring net revenues of the wastewater system to be at least equal to 1.20 times the amount necessary to pay principal and interest on the bonds and all other parity bonds.

Airport Refunding Revenue Bonds, Series 2019
On April 1, 2019, the Santa Barbara Financing Authority (Authority) issued Refunding Revenue Bonds, Series 2019 in the amount of $29,825,000 to refund the 2009 Airport Revenue bonds. The net proceeds of $41,158,138 (including an original issue premium of $4,249,187, less payment of $486,448 in underwriting fees and other issuance costs and a net additional $3,000,000 from the Airport PFC funds and $4,570,399 contribution from the 2009 Airport Bond fund monies) were used to purchase U.S. Government securities. Those securities were deposited in an irrevocable trust with an escrow agent to provide for the full payoff of the 2009 Bonds and all future debt service payments on the advance refunding. As a result, the 2009 Bonds are considered to be defeased and the liability for those bonds has been removed from the financial statements of the Airport Enterprise Fund.

The City and Authority entered into a Facility Lease agreement whereby the City pledges to make the necessary annual appropriations and make base rental payments equal to the annual debt service requirements. The remaining annual payments range between $2,460,500 to $2,472,750. The final payment is due April 1, 2038.

Certificates of Participation
Water Revenue Refunding Certificates of Participation, Series 2013 On May 22, 2013, the City issued Water Revenue Refunding Certificates of Participation, Series 2013 in the amount of $22,680,000 to refund the 2003 California Department of Health Services Safe Drinking Water Loan and Water Revenue Certificates of Participation, Series 2002.

CITY OF SANTA BARBARA

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
(83)
NOTE 7 LONG-TERM DEBT (CONTINUED)
Business-Type Activities (Continued)
Certificates of Participation (Continued)
Water Revenue Refunding Certificates of Participation, Series 2013 (Continued) The net proceeds of $27,076,018 (including an original issue premium of $2,881,209, less payment of $334,568 in underwriting fees, bond insurance, and other issuance costs and a net additional $761,108 contribution from the Water Revenue Fund and $1,088,269 of 2002 COP’s reserve fund monies) were used to purchase U.S. Government securities. Those securities were deposited in an irrevocable trust with an escrow agent to provide for the full payoff of the 2003 State loan, and all future debt service payments on the advance refunding of the 2002 COP’s. As a result, the 2002 COP’s are considered to be defeased and the liability for those bonds has been removed from the financial statements of the Water Enterprise Fund.

This debt issue is subject to a reserve requirement in conjunction with nonsubordinate (parity) debt issued by the City. The City is in compliance with the revenue rate covenant requiring net revenues of the water system to be at least equal to 1.25 times the amount necessary to pay principal and interest on the bonds and all other parity bonds.

NOTE 8 CONTINGENCIES AND COMMITMENTS
Litigation and Claims
The City is presently involved in matters of litigation and claims that have arisen in the normal course of conducting City business. City management believes that, based upon consultation with the City Attorney, these cases, in the aggregate, are not expected to result in a material adverse financial impact on the City.

Grants
Amounts received or receivable from granting agencies are subject to audit and adjustment by grantor agencies. Grantor agencies may subject grant programs to additional compliance tests, which may result in disallowed costs. In the opinion of management, future disallowances of current or prior grant expenditures, if any, would not have a material adverse effect on the financial position of the City.

Encumbrances
The City uses encumbrances to control expenditure commitments for the year and to enhance cash management. Encumbrances represent commitments related to contracts not yet performed and purchase orders not yet filled (executory contracts; and open purchase orders). Commitments for such expenditure of monies are encumbered to reserve a portion of applicable appropriations. Encumbrances still open at year-end are not accounted for as expenditures and liabilities but, rather, as restricted or committed governmental fund balance. As of June 30, 2022, total governmental fund encumbrance balances for the City are as follows:

General Fund 1,806,287 $
Other Governmental Funds 26,541,770
Total Governmental Funds 28,348,057 $

CITY OF SANTA BARBARA

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
(84)
NOTE 9 RETIREMENT COMMITMENTS
The following is a summary of pension related items for the year ended June 30, 2022:

Deferred Deferred Net Pension Pension
Outflows Inflows Liability Expense
Miscellaneous 24,900,529 $ $ 108,992,932 (53,777,938) $ 2,948,261 $ Safety Police 11,686,738 70,053,022 (22,501,800) 4,747,018 Safety Fire 18,344,260 59,108,788 (37,630,921) 23,255,131 Safety Retirement 26,232 - 111,392 (13,390)
Total 54,957,759 $ (113,910,659) $ 238,266,134 $ 30,937,020 $ Pension liabilities are liquidated from the related employees’ home program, with the majority funded out of the General Fund.

A. Public Employees’ Retirement System (CalPERS)

1. General Information about the Pension Plans
Plan Descriptions
All qualified permanent and probationary employees are eligible to participate in the City’s separate Safety (police) and Miscellaneous (all other) Plans, agent multipleemployer defined benefit pension plans and the City’s Safety (fire) Plan, a cost sharing defined benefit plan administered by the California Public Employees’ Retirement System (CalPERS), which acts as a common investment and administrative agent for its participating member employers. Benefit provisions under the Plans are established by State statute and Local Government resolution.

CalPERS issues publicly available reports that include a full description of the pension plans regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website.

Benefits Provided
CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full time employment. Members with five years of total service are eligible to retire at age 50 to 62 with statutorily reduced benefits. For employees hired into a plan with the 1.5% at 65 formula, eligibility for service retirement is age 55 with at least five years of services. PEPRA miscellaneous members become eligible for service retirement upon attainment of age 52 with at least five years of service. All members are eligible for nonduty disability benefits after five 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. Safety members can receive a special death benefit if the member dies while actively employed and the death is job-related.

CITY OF SANTA BARBARA

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
(85)
NOTE 9 RETIREMENT COMMITMENTS (CONTINUED)
A. Public Employees’ Retirement System (CalPERS) (Continued)

1. General Information about the Pension Plans (Continued) Benefits Provided (Continued)
Fire members may receive the alternate death benefit in lieu of the Basic Death Benefit or the 1957 Survivor Benefit if the member dies while actively employed and has at least 20 years of total CalPERS service. The cost of living adjustments for each plan are applied as specified by the Public Employees’ Retirement Law. The Public Employees’ Pension Reform Act of 2013 (PEPRA) requires new benefits and member contributions for new members as defined by PEPRA, that are hired after January 1, 2013. Pursuant to PEPRA, the Miscellaneous and Safety (Police and Fire) “Classic” plans are closed to new entrants as of January 1, 2013.

The Plans’ provisions and benefits in effect at June 30, 2022, are summarized as follows:

Miscellaneous Miscellaneous Safety Safety
Plan Plan Police Plan Police Plan Safety Fire Safety Fire Hire Date Prior to April 1, After January 1, Prior to April 1, After January 1, Prior to January 1, After January 1, 2012 (Tier 1) 2013 (PEPRA) 2012 (Tier 1) 2013 (PEPRA) 2013 2013 (PEPRA) Benefit Formula 2.7% at 55 2% at 62 3% at 50 2.7% at 57 3% at 50 2.7% at 57 Benefit Vesting Schedule 5 Years of 5 Years of 5 Years of Credited Service Credited Service Credited Service
Benefit Payments Monthly for Life Monthly for Life Monthly for Life Retirement Age 50 and up 52 and up 50 and up 50 and up 50 and up 50 and up Monthly Benefits, as a Percent
of Eligible Compensation 2.0% - 2.7% 1.0% - 2.5% 3.00% 2.0% - 2.7% 3.00% 2.0% - 2.7% Required Employee
Contribution Rates 7.58% 6.75% 10.21% 12.00% 8.99% 13.75% Required Employer
Contribution Rates
Normal Cost Rate 11.720% 11.720% 22.090% 22.090% 25.590% 13.980% Payment of Unfunded Liability 16,754,789 $ - $ 7,140,875 $ - $ $5,651,127 $7,954 Employees Covered
At the measurement date ended June 30, 2021, the following employees were covered by the benefit terms for each Plan:

Miscellaneous Safety (Police)
Inactive Employees or Beneficiaries Currently
Receiving Benefits 1,143 270
Inactive Employees Entitled to But Not Yet
Receiving Benefits 992 75
Active Employees 734 129
Total 2,869 474

CITY OF SANTA BARBARA

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
(86)
NOTE 9 RETIREMENT COMMITMENTS (CONTINUED)
A. Public Employees’ Retirement System (CalPERS) (Continued)

1. General Information about the Pension Plans (Continued) Contributions
Section 20814(c) of the California Public Employees’ Retirement Law requires that the employer contribution rates for all public employers are 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’s annual actuarial valuation process. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The City is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. City 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 contributions requirements are classified as plan member contributions. The City made contributions to the Miscellaneous, Safety (police) and Safety (fire) during the fiscal year ended June 30, 2022, of $23,966,594, $10,508,925, and $8,084,528, respectively.

2. Net Pension Liability
The City’s net pension liability for each Plan is measured as the total pension liability, less the pension plan’s fiduciary net position. The net pension liability of each of the Plans is measured as of June 30, 2021, using an annual actuarial valuation as of June 30, 2020 rolled forward to June 30, 2021 using standard update procedures. A summary of principal assumptions and methods used to determine the net pension liability is shown below.

CITY OF SANTA BARBARA

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
(87)
NOTE 9 RETIREMENT COMMITMENTS (CONTINUED)
A. Public Employees’ Retirement System (CalPERS) (Continued)

2. Net Pension Liability (Continued)
Actuarial Assumptions
The total pension liabilities in the June 30, 2020 actuarial valuations were determined using the following actuarial assumptions:

Miscellaneous Plan Safety Police Plan Safety Fire Plan
Valuation Date June 30, 2020 June 30, 2020 June 30, 2020 Measurement Date June 30, 2021 June 30, 2021 June 30, 2021 Actuarial Cost Method Entry-Age Normal Entry-Age Normal Entry-Age Normal Cost Method Cost Method Cost Method
Actuarial Assumptions:

Discount Rate 7.15% 7.15% 7.15%
Inflation 2.50% 2.50% 2.50%
Projected Salary Increase (1) (1) (1)
Mortality Rate Table (2) (2) (2)
Post Retirement Benefit Increase (3) (3) (3)
(1) Varies by entry age and service.
(2) The mortality table used was developed based on CalPERS-specific data. The probabilities of mortality are based on the 2017 CalPERS Experience Study for the period from 1997 to 2015. Preretirement and Postretirement 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.
(3) The lesser of contract COLA or 2.50% until Purchasing Power Protection Allowance Floor on purchasing power applies, 2.50% thereafter.

Long-Term Expected Rate of Return
The long-term expected rate of return on pension plan investments was determined using a building-block method in which expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class.

CITY OF SANTA BARBARA

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
(88)
NOTE 9 RETIREMENT COMMITMENTS (CONTINUED)
A. Public Employees’ Retirement System (CalPERS) (Continued)

2. Net Pension Liability (Continued)
Long-Term Expected Rate of Return (Continued)
In determining the long-term expected rate of return, CalPERS took into account both short-term and long-term market return expectations as well as the expected pension fund cash flows. Using historical returns of all the funds’ asset classes, expected compound (geometric) returns were calculated over the short-term (first 10 years) and the long-term (11+ -60 years) using a building-block approach. Using the expected nominal returns for both short-term and long-term, the present value of benefits was calculated for each fund. The expected rate of return was set by calculating the rounded single equivalent expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and long-term returns. The expected rate of return was then set equal to the single equivalent rate calculated above and adjusted to account for assumed administrative expenses.

The expected real rates of return by asset class are as follows:

Assumed Real Return Real Return
Asset Years Years
Asset Class (a) Allocation 1 - 10 (b) 11+ (c)
Global Equity 50.00% 4.80% 5.98%
Fixed Income 28.00% 1.00% 2.62%
Inflation Assets 0.00% 0.77% 1.81%
Private Equity 8.00% 6.30% 7.23%
Real Assets 13.00% 3.75% 4.93%
Liquidity 1.00% 0.00% -0.92%
Total 100.00%
(a) In the CalPERS 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.
(b) An expected inflation of 2.0% used for this period. (c) An expected inflation of 2.92% used for this period.

CITY OF SANTA BARBARA

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
(89)
NOTE 9 RETIREMENT COMMITMENTS (CONTINUED)
A. Public Employees’ Retirement System (CalPERS) (Continued)

2. Net Pension Liability (Continued)
Discount Rate
The discount rate used to measure the total pension liability 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.

Subsequent Events
On July 12, 2021, CalPERS reported a preliminary 21.3% net return on investments for fiscal year 2020-2021. 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 reflected in the GASB 68 accounting valuation reports for the June 30, 2022, measurement date.

CITY OF SANTA BARBARA

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
(90)
NOTE 9 RETIREMENT COMMITMENTS (CONTINUED)
A. Public Employees’ Retirement System (CalPERS) (Continued)

3. Changes in the Net Pension Liability
The changes in the Net Pension Liability for each Plan follows:

Miscellaneous Plan
Total Plan Net Pension
Pension Fiduciary Liability
Liability Net Position (Asset)
Balance at June 30, 2020
(Measurement Date) 651,820,561 $ 468,071,367 $ 183,749,194 $ Changes in the Year:

Service Cost 10,993,296 - 10,993,296
Interest on the Total Pension Liability 45,902,084 - 45,902,084 Changes in Assumptions - - -
Differences Between Actual and
Expected Experience 1,483,308 - 1,483,308
Net Plan to Plan Resource Movement - - -
Contribution - Employer - 20,887,408 (20,887,408)
Contribution - Employee - 6,252,846 (6,252,846)
Net Investment Income - 106,462,271 (106,462,271)
Benefit Payments, Including Refunds
of Employee Contributions (33,626,670) (33,626,670) -
Administrative Expenses - (467,575) 467,575
Other Miscellaneous Income
(Expense) - - -
Net Changes 24,752,018 99,508,280 (74,756,262)
Balance at June 30, 2021
(Measurement Date) 676,572,579 $ 567,579,647 $ 108,992,932 $ Increase (Decrease)

CITY OF SANTA BARBARA

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
(91)
NOTE 9 RETIREMENT COMMITMENTS (CONTINUED)
A. Public Employees’ Retirement System (CalPERS) (Continued)

3. Changes in the Net Pension Liability (Continued)
Safety Police Plan
Total Plan Net Pension
Pension Fiduciary Liability
Liability Net Position (Asset)
Balance at June 30, 2020
(Measurement Date) 298,758,010 $ 198,952,763 $ 99,805,247 $ Changes in the Year:

Service Cost 5,132,860 - 5,132,860
Interest on the Total Pension Liability 20,991,410 - 20,991,410 Changes in Assumptions - - -
Differences Between Actual and
Expected Experience 422,522 - 422,522
Net Plan to Plan Resource Movement - - -
Contribution - Employer - 9,754,764 (9,754,764)
Contribution - Employee - 1,720,503 (1,720,503)
Net Investment Income - 45,022,492 (45,022,492)
Benefit Payments, Including Refunds
of Employee Contributions (16,321,634) (16,321,634) -
Administrative Expenses - (198,742) 198,742
Other Miscellaneous Income
(Expense) - - -
Net Changes 10,225,158 39,977,383 (29,752,225)
Balance at June 30, 2021
(Measurement Date) 308,983,168 $ 238,930,146 $ 70,053,022 $ Increase (Decrease)
Proportionate Share of Net Pension Liability
As of June 30, 2022, the City reported net pension liabilities for its proportionate shares of the net pension liability for the Safety Fire Plan as follows:

Proportionate
Share of
Net Pension
Liability
Safety Fire Plan 59,108,788 $

CITY OF SANTA BARBARA

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
(92)
NOTE 9 RETIREMENT COMMITMENTS (CONTINUED)
A. Public Employees’ Retirement System (CalPERS) (Continued)

3. Changes in the Net Pension Liability (Continued)
Proportionate Share of Net Pension Liability (Continued) The City’s net pension liability for each Plan is measured as the proportionate share of the net pension liability. The net pension liability of each of the Plans is measured as of June 30, 2021, and the total pension liability for each Plan used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2020 rolled forward to June 30, 2021 using standard update procedures. The City’s proportionate share of the net pension liability was based on a projection of the City’s long-term share of contributions to the pension plans relative to the projected contributions of all participating employers, actuarially determined.

The City’s proportionate share of the net pension liability for the Safety Fire Plan as of June 30, 2020 and 2021 was as follows:

Safety Fire
Proportion - June 30, 2020 1.17141%
Proportion - June 30, 2021 1.68426%
Change - Increase (Decrease) 0.51285%
Sensitivity of the Net Pension Liability to Changes in the Discount Rate The following presents the net pension liability of the City for each Plan, calculated using the discount rate for each Plan, as well as what the City’s net pension liability would be if it were calculated using a discount rate that is one percentage point lower or one percentage point higher than the current rate:
1% Decrease Current Rate 1% Increase
Plan Type (6.15%) (7.15%) (8.15%)
Miscellaneous $ 108,992,932 196,000,923 $ 36,982,862 $
Safety Police 70,053,022 111,001,023 36,453,874
Safety Fire 59,108,788 88,010,245 35,369,811
Total $ 238,154,742 395,012,191 $ 108,806,547 $
Discount Rate
Pension Plan Fiduciary Net Position
Detailed information about each pension plan’s fiduciary net position is available in the separately issued CalPERS financial reports.

CITY OF SANTA BARBARA

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
(93)
NOTE 9 RETIREMENT COMMITMENTS (CONTINUED)
A. Public Employees’ Retirement System (CalPERS) (Continued)

4. Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions
For the year ended June 30, 2022, the City of Santa Barbara Miscellaneous, Safety Police and Safety Fire Plans recognized pension expense of $2,948,261, $4,747,018 and $23,255,131 respectively. At June 30, 2022, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

Miscellaneous Plan
Deferred Deferred
Outflows of Inflows of
Resources Resources
Pension Contributions Subsequent to
Measurement Date $ - 23,966,594 $
Differences Between Actual and Expected Experience 933,935 (463,144) Changes of Assumptions - -
Net Differences Between Projected and Actual
Earnings on Plan Investments - (53,314,794)
Total 24,900,529 $ (53,777,938) $
Safety Police Plan
Deferred Deferred
Outflows of Inflows of
Resources Resources
Pension Contributions Subsequent to
Measurement Date $ - 10,508,925 $
Differences Between Actual and Expected Experience 1,177,813 - Changes of Assumptions - -
Net Differences Between Projected and Actual
Earnings on Plan Investments - (22,501,800)
Total 11,686,738 $ (22,501,800) $

CITY OF SANTA BARBARA

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
(94)
NOTE 9 RETIREMENT COMMITMENTS (CONTINUED)
A. Public Employees’ Retirement System (CalPERS) (Continued)

4. Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions (Continued)
Safety Fire Plan
Deferred Deferred
Outflows of Inflows of
Resources Resources
Pension Contributions Subsequent to
Measurement Date $ - 8,084,528 $
Differences Between Actual and Expected Experience 10,098,685 - Changes of Assumptions - -
Changes in Proportion and Difference Between
Employer Contributions and Proportionate Share
of Contributions 161,047 (2,449,829)
Net Differences Between Projected and Actual
Earnings on Plan Investments - (35,181,092)
Total 18,344,260 $ (37,630,921) $
$23,966,588 for Miscellaneous, $10,508,925 for Safety Police and $8,084,528 for Safety Fire are reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2023. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:

Miscellaneous Plan Safety Police Plan Safety Fire Plan
Deferred Deferred Deferred
Outflows/Inflows Outflows/Inflows Outflows/Inflows
Year Ending June 30, of Resources of Resources of Resources 2023 (13,410,387) $ (4,896,730) $ (4,341,191) $
2024 (11,991,463) (4,897,369) (5,677,625)
2025 (12,784,285) (5,333,487) (7,671,028)
2026 (14,657,868) (6,196,401) (9,681,345)

5. Payable to the Pension Plan
At June 30, 2022, the City had no outstanding amount of contributions to the pension plan required for the year ended June 30, 2022.

CITY OF SANTA BARBARA

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
(95)
NOTE 9 RETIREMENT COMMITMENTS (CONTINUED)
B. City Safety Retirement Pension Plan

1. General Information about the Pension Plan
Plan Description
In addition to the CalPERS, the City provides an additional single-employer defined benefit pension plan. The Safety Retirement Plan was established to account for the accumulation of resources to be used for retirement benefits for those police and fire employees hired between May 1937 and May 1965, and who were disabled due to job related injuries. No assets are accumulated in a trust that meets the criteria in paragraph 4 of GASB Statement 68. The plan does not issue a separate report.

Benefits Provided and Employees Covered
As of June 30, 2021 measurement date, a total of five (5) retirees (or beneficiaries) are receiving benefits from the Safety Retirement Pension Trust Fund.

Contributions
For the year ended June 30, 2022, the Plan’s contribution was $26,232.

2. Total Pension Liability
The total pension liability of the Plan is measured as of June 30, 202, using an annual actuarial valuation as of June 30, 202. A summary of principal assumptions and methods used to determine the net pension liability is shown below.

Measurement Date June 30, 2021
Valuation Date June 30, 2021
Discount Rate 2.16%
Salary Increases Not Assumed
Mortality rates were based on CalPERS 2000-2019 Experience Study. Mortality improvement Scale MP-2021 applied on a generational basis.

Discount Rate
The discount rate used to measure the total pension liability was 2.16% based on bond buyer 20-Bond General Obligation Index as of June 30, 2021.

Change in Assumption
The discount rate changed from 2.21% to 2.16%.

Subsequent Events
There were no subsequent events that would materially affect the results in this disclosure.

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NOTE 9 RETIREMENT COMMITMENTS (CONTINUED)
B. City Safety Retirement Pension Plan (Continued)

3. Changes in Total Pension Liability
The changes in the total pension liability are as follows:

Total Pension
Liability
Balance at June 30, 2020 $ 156,930
Changes in the Year:

Interest on Total Pension Liability 3,124
Differences Between Actual and
Expected Experience (16,140)
Changes in Assumptions (1,370)
Benefit Payments, Including Refunds
of Employee Contributions (31,152)
Net Changes (45,538)
Balance at June 30, 2021 $ 111,392
Sensitivity of the Total Pension Liability to Changes in the Discount Rate The following presents the total pension liability of the Plan, calculated using the discount rate of 2.16%, as well as what the total pension liability would be if it were calculated using a discount rate that is 1% lower (1.16%) or 1% higher (3.16%) than the current rate.

Current
1% Lower Discount Rate 1% Higher
Safety Fire Plan (1.16%) (2.16%) (3.16%)
Plan's Net Pension Liability/Assets $ 111,392 115,344 $ 107,712 $

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NOTE 9 RETIREMENT COMMITMENTS (CONTINUED)
B. City Safety Retirement Pension Plan (Continued)

3. Changes in Total Pension Liability (Continued)
Pension Expense and Deferred Outflows/Inflows of Resources Related to Pensions For the year ended June 30, 2022, the City recognized pension income of $13,390.

As of June 30, 2022, for the Safety Retirement Plan, the City has deferred outflows and deferred inflows of resources related to pensions as follows:

Deferred Deferred
Outflows of Inflows of
Resources Resources
Contributions Made After the Measurement Date $ - 26,232 $ Total 26,232 $ - $
$26,232 reported as deferred outflows of resources related to contribution subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2023.

C. Deferred Compensation Plan
The City offers two deferred compensation plans for regular employees and one for hourly employees created in accordance with Internal Revenue Code Section 457.

Under the terms of these plans, employees may defer amounts of income up to a maximum of $17,500 per year or 100% of includable compensation, whichever is less.

Amounts so deferred may be withdrawn or directed for future payment at separation of employment but may not be paid to the employee during employment with the City except for a catastrophic circumstance creating an undue and unforeseen financial hardship for the employee.

Effective January 1, 1999, Federal legislation (Small Business Job Protection Act of 1996) requires the Section 457 plan assets to be placed in trust for the exclusive use of the plan participants and their beneficiaries. The City’s deferred compensation administrator qualifies as the plan trustee to meet Federal requirements. Since the plan assets are no longer considered the property and rights of the City, such assets are no longer reflected in the accompanying basic financial statements.

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NOTE 10 DEFERRED INFLOWS OF RESOURCES
Pursuant to GASB Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position, and GASB Statement No. 65, Items Previously Reported as Assets and Liabilities, the City recognized deferred inflows of resources in the entity- wide and proprietary fund statements. This item represents a consumption of net assets that applies to future periods. Previous financial reporting standards do not include guidance for reporting those financial statement elements, which are distinct from assets and liabilities.

Under the modified accrual basis of accounting, it is not enough that revenue has been earned if it is to be recognized in the current period. Revenue must also be susceptible to accrual (i.e., measurable and available to finance expenditures of the current period). Governmental funds report revenues not considered available to liquidate liabilities of the current period as deferred inflows of resources.

Gains and losses related to changes in net pension liability and total OPEB liability are recognized systematically over time. Amounts are first recognized in pension or 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 pension or OPEB and are recognized in future pension and OPEB expense. The recognition period differs based on the source of the gain or loss. For the net difference between the projected and actual earnings on plan investments it is 5 years. All other amounts are recognized over the expected average remaining service lifetime. Lease related inflows are amortized on a straight line basis over the length of the lease agreement.

Deferred inflows of resources balances as reported on the Statement of Net Position for the year ended June 30, 2022, were as follows:

Governmental Activities
Deferred Pension-Related Items 95,719,180 $
Deferred OPEB-Related Items 8,368,983
Deferred Lease-Related Items 4,550,100
Total 108,638,263 $
Business-Type Activities
Deferred Pension-Related Items 18,191,478
Deferred Lease-Related Items 37,531,467
Total 55,722,945 $

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NOTE 10 DEFERRED INFLOWS OF RESOURCES (CONTINUED)
Deferred inflows of resources balances as reported on the Governmental Funds Balance Sheet for the year ended June 30, 2022, were as follows:

Governmental Fund Financials
Major Government Funds
General Fund - Lease Related Items 4,180,757 $
General Fund - Unavailable Recycling Grant Revenue 25,004 General Fund - Unavailable Housing Planning Grant Revenue 1,226 General Fund - Unavailable Administrative Citation Revenue 386,693 Total 4,593,680 $
Nonmajor Governmental Funds
Streets Fund - Lease Related Items 369,343 $
Community Development Block Grant Fund -
Unavailable Grant Revenue 4,939
Misc. Grants Fund - Unavailable Grant Revenue 286,709
General Capital Improvements Fund -
Unavailable Grant Revenue 3,627
PLHA Fund - Unavailable Grant Revenue 90,825
FEMA Reimbursement Fund - Unavailable Grant Revenue 2,211,566 Street Grant Capital Fund - Unavailable Grant Revenue 6,685,880 Total 9,652,889 $
NOTE 11 CLASSIFICATION OF NET POSITION
In the government-wide financial statements, net position are classified as the following:

Net Investment in Capital Assets – This category groups all capital assets, including infrastructure, into one component of net position. Accumulated depreciation and the outstanding balances of debt that are attributable to the acquisition, construction or improvement of these assets reduce this category.

Restricted Net Position – This category presents all external restrictions imposed by creditors, grantors, contributors or laws or regulations of other governments and restrictions imposed by law through constitutional provisions or enabling legislation.

Unrestricted Net Position – This category represents the net position of the City, which are not restricted for any project or other purpose.

In the Fund financial statements, governmental funds report the following fund balance classifications:

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

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NOTE 11 CLASSIFICATION OF NET POSITION (CONTINUED)
Restricted – Amounts that are constrained on the use of resources by either (a) external creditors, grantors, contributors, or laws of regulations of other governments or (b) by law through constitutional provisions or enabling legislation.

Committed – Amounts that can only be used for specific purposes pursuant to constraints imposed by formal action of the government’s highest authority, the City Council of the City of Santa Barbara. The formal action that is required to be taken to establish, modify, or rescind a fund balance commitment is a resolution by the City Council of the City of Santa Barbara.

Assigned – Amounts that are constrained by the government’s intent to be used for specific purposes, but are neither restricted nor committed. The City Administrator or Finance Director are authorized to assign amounts to a specific purpose as per the approved City Council Resolution No. 12-069.

Unassigned – Residual amounts that have not been restricted, committed, or assigned to specific purposes.

The General Fund is the only fund that may report a positive unassigned fund balance.

However, in governmental funds other than the General Fund, if expenditures incurred for specific purposes exceed the amounts that are restricted, committed, or assigned for those purposes, it may be necessary to report a negative unassigned fund balance in that fund.

An individual governmental fund could include nonspendable resources and amounts that are restricted or unrestricted (committed, assigned, or unassigned) or any combination of those classifications. Restricted or unrestricted amounts are to be considered spent when an expenditure is incurred for purposes for which both restricted and unrestricted fund balance is available. Committed, assigned, then unassigned amounts are considered to have been spent when an expenditure is incurred for purposes for which amounts in any of those unrestricted fund balance classifications can be used.

The City’s general fund reserve policy consists of a Disaster Reserve of 15% of the general fund’s most recently adopted fiscal year operating budget and a Contingency Reserve of 10% of the general fund’s most recently adopted fiscal year operating budget. The use of the Disaster Reserve is limited to federal or state declared disasters and may only be used only after other available funds are exhausted, including the contingency reserve. The purpose of the Contingency reserve is to allow for the orderly implementation of a balancing strategy to address the fiscal impacts of unexpected events such as natural disasters, revenue impacts resulting from State actions or unfunded State mandates, unexpected loss of external funding from sources such as grants, unplanned loss of, or damage to, a City facility, mitigation of an emergency that poses a threat to public health and safety and adverse judicial actual that requires large cash payments to third parties.

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NOTE 11 CLASSIFICATION OF NET POSITION (CONTINUED)
The components of the City’s fund balances at June 30, 2022, consist of the following:

Special Revenue
Funds Other
General Affordable Governmental Governmental
Fund Housing Fund Funds
Fund Balances
Nonspendable:

Prepaid Assets and Deposits 121,676 $ - $ - $ 121,676 $ Loans Receivable 118,353 - - 118,353
Lease Receivable 4,291,989 - - 4,291,989
Advances to Other Funds 2,527,707 - - 2,527,707
Restricted for:

Administration 33,780 - 33,780
Public Safety 330,467 - 1,037,415 1,367,882
Public Works 12,326 - 17,116,297 17,128,623
Community Services - - 5,964,571 5,964,571
Community Development 2,127,169 - 1,176,332 3,303,501
Capital Improvements - - 2,683,535 2,683,535
Affordable Housing - 67,883,756 - 67,883,756
Committed for:

Capital Improvements - - 40,552,453 40,552,453
Contingencies 15,650,447 - - 15,650,447
Disaster Contingency 23,475,670 - - 23,475,670
Unassigned 2,878,551 - (9,028,219) (6,149,668)
Total Fund Balances 51,568,135 $ 67,883,756 $ 59,502,384 $ 178,954,275 $ NOTE 12 SELF-INSURANCE FUND
The City is partially self-insured for workers’ compensation and general and automobile liability claims, and fully self-insured for unemployment claims. The City has been partially self-insured for workers’ compensation since 1974, and partially self-insured for general and automobile liability since 1978. There have been no significant changes in insurance coverage as compared to last year and settlements have not exceeded coverage in any of the past three fiscal years.

The City’s workers’ compensation program maintains a self-insured retention of $750,000.

The City purchases an excess insurance policy that provides statutory limits in excess of the City’s self-insured retention. The excess insurance coverage consists of a $9 million pooled layer above the City’s self-insured retention amount plus the use of commercial insurance above the pooled layer. Employers’ Liability coverage is also included within the limits of the $9 million pooled layer.

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NOTE 12 SELF-INSURANCE FUND (CONTINUED)
The City’s general and automobile liability program maintains a self-insured retention of $1,000,000. Excess liability coverage is provided through a Joint Powers Agreement. The City joined the Authority of California Cities Excess Liability (ACCEL) in July 1986. ACCEL is a public entity risk sharing pool created for the purpose of pooling various public sector risks. ACCEL began its 36th year July 2021 with membership totaling 13 cities. ACCEL was formed under the Joint Powers Agreement (JPA) provisions of State Law (Government Code Sections 990, 990.4, 990.8 and 65006515). In addition to the joint powers agreement, ACCEL is governed by bylaws, an investment policy, and a Memorandum of Coverage, adopted by the ACCEL members.

ACCEL now transfers most of its risk sharing exposures through the purchase of a series of commercial insurance policies underwritten by various carriers. ACCEL members have a $1 million self-insured retention. ACCEL pools the next $9 million, and the purchased commercial carriers provide $44 million in coverage above that level. Thus, the City’s participation in ACCEL provides liability coverage of $55 million.

A Memorandum of Coverage acts as the instrument by which member cities are protected against covered losses above the self- insured retention (SIR). This document also serves as the manuscript form for which the commercial carriers provide coverage. Coverage includes comprehensive general and automobile liability protecting against bodily injury, property damage, public officials’ errors and omissions, personal injury, employment practices, as well as damages arising from owned, nonowned, and hired automobiles.

A Board of Directors (Board) consisting of one representative from each member city governs ACCEL. This Board controls all aspects of ACCEL policy including budgeting, finance, underwriting, and claims. ACCEL conducts annual financial, claims, and payroll audits, and an annual actuarial study. A retrospective rating is performed each year on the program year ended five years earlier. The retrospective rating determines each member’s share of losses and deposit return. ACCEL members share pooled losses above their selfinsured retention. Losses are paid from a pool of funds comprised of member deposits.

Deposits are actuarially determined to ensure that funds are available to pay any losses within the pooled layer. ACCEL collects a deposit from every member City for each program year in which the member participates. Separate deposit accounts are set for each member for each year of participation. Deposits are invested into pre- approved vehicles and each member account is credited monthly with investment income at the rate earned by the investment vehicle. ACCEL adopted its investment policy in accordance with existing government code criteria.

Insurable property is covered for all risks by policies with a pooled aggregate limit of $1 billion. Earthquake and flood coverage have designated limits of $30 million per peril.

Unique risks such as airport liability, marine hull protection and indemnity, and boiler and machinery are fully insured. The City also maintains a faithful performance bond, and cyber liability insurance. The City filed two separate claims under the Cyber Liability insurance policy during fiscal year 2022. No other claims were filed during fiscal year 2022.

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NOTE 12 SELF-INSURANCE FUND (CONTINUED)
The City’s self-insurance fund is financed through contributions made by the City’s General and Enterprise Funds. A cost allocation plan is used to apportion self-insurance fund costs.

An actuarial study is performed every two-years. Actuarially determined liabilities in the fund include provisions for "incurred but not reported" claims. As of June 30, 2022, the estimated outstanding liabilities are $15,888,267 for workers’ compensation and $2,435,519 for general and automobile liability.

These liabilities are based on an actuarial valuation as of June 30, 2020. There are no unpaid claims for which annuity contracts have been purchased.

The City is self-insured for unemployment claims. At June 30, 2022, the liability for unemployment claims was $19,616, which is not included below. A summary of changes in claims liabilities is shown below:
2022 2021 2020
Claims Liabilities - July 1 18,386,428 $ 17,162,911 $ 15,925,462 $ Incurred Claims 4,908,663 6,344,299 5,469,034
Actuarial Adjustment (62,642) 4,623,517 (162,551)
Payments on Claims Attributable to
Events of Current and Prior Years (4,908,663) (9,744,299) (4,069,034) Claims Liabilities - June 30 18,323,786 $ 18,386,428 $ 17,162,911 $ NOTE 13 JOINT POWER AGREEMENTS
Central Coast Water Authority
In 1991, the City’s electorate approved participation in the State Water Project (SWP). As a result, the City joined in the formation of the Central Coast Water Authority (CCWA) in September 1991. The purpose of the Central Coast Water Authority is to provide for the financing, construction, operation, and maintenance of certain local (non-state owned) facilities required to deliver water from the SWP to certain water purveyors and users in Santa Barbara County.

Each CCWA Member Agency, including the City of Santa Barbara, has entered into a Water Supply Agreement in order to provide for the development, financing, construction, operation, and maintenance of the CCWA Project. The purpose of the Water Supply Agreement is to assist in carrying out the purposes of CCWA with respect to the CCWA Project by: (1) requiring CCWA to sell, and the Santa Barbara Project participants to buy, a specified amount of water from CCWA (take or pay); and (2) assigning the Santa Barbara Project participant’s entitlement rights in the State Water Project to CCWA. Although the City does have an ongoing financial responsibility pursuant to the Water Supply Agreement between the City and CCWA, the City does not have an equity interest as defined by GASB Cod. Sec. J50.105.

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NOTE 13 JOINT POWER AGREEMENTS (CONTINUED)
Central Coast Water Authority (Continued)
Each Santa Barbara Project participant is required to pay to CCWA an amount equal to its share of the total cost of “fixed project costs” and certain other costs in the proportion established in the Water Supply Agreement. This includes the Santa Barbara Project participant’s share of payments to the California Department of Water Resources (DWR) under the State Water Supply Contract (including capital, operation, maintenance, power, and replacement costs of the DWR facilities), debt service on CCWA bonds, and all CCWA operating and administrative costs.

Each Santa Barbara Project participant is required to make payments under its Water Supply Agreement solely from the revenues of its water system. Each participant has agreed in its Water Supply Agreement to fix, prescribe, and collect rates and charges for its water system which will be at least sufficient to yield each fiscal year net revenues equal to 125% of the sum of (1) the payments required pursuant to the Water Supply Agreement, and (2) debt service on any existing participant obligation for which revenues are also pledged.

CCWA is composed of eight Member Agencies, all of which are public agencies. CCWA was organized and exists under a joint exercise of power agreement among the various participating public agencies. The Board of Directors is made up of one representative from each participating entity. Votes on the Board are apportioned between the entities based upon each entity’s pro-rata share of the water provided by the project. The City’s voting share of the project, based upon approximate allocation of State Water entitlement, is

11.47%. Operating and capital expenses are allocated among the members based upon various formulas recognizing the benefits of the various project components to each member.

On October 1, 1992, CCWA sold $177,200,000 in revenue bonds at a true interest cost of

6.64% to enable CCWA to finance a portion of the costs of constructing a water treatment plant to treat State water for use by various participating water purveyors and users within Santa Barbara and San Luis Obispo Counties, a transmission system to deliver such water to the participating water purveyors and users within Santa Barbara County, and certain local improvements to the water systems of some of the participating purveyors.

On November 1, 1996, CCWA sold $198,015,000 of revenue bonds at a true interest cost of

5.55% to defease CCWA’s $177,120,000 1992 revenue bonds and to pay certain costs of issuing the bonds. The 1996 bonds were issued in two series: Series A of $173,015,000 and Series B of $25,000,000. The Series B bonds are subject to mandatory redemption from amounts transferred from the Construction Fund and the Reserve Fund upon completion of the construction of CCWA facilities.

On September 28, 2006, CCWA sold $123,190,000 of revenue bonds at an average interest rate of 4.24% to refund $142,985,000 of outstanding 1996 Revenue Bonds with an average interest rate of 5.47%.

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NOTE 13 JOINT POWER AGREEMENTS (CONTINUED)
Central Coast Water Authority (Continued)
On June 28, 2016, CCWA issued $45,470,000 of revenue bonds at an average interest rate of 1.355% to refund $59,645,000 of outstanding 2006 revenue bonds with an average interest rate of 4.24%.

Pursuant to the Water Supply Agreement, the City of Santa Barbara’s payments to CCWA includes its share of DWR’s fixed and variable costs, the debt service requirements on the CCWA Bonds, CCWA’s fixed operating and maintenance costs, and variable costs, as shown on the following table:

TOTAL CCWA
Fiscal Fixed Variable Fixed Variable Total CCWA AND DWR Year Costs Costs (1) Costs Costs (1) Costs COSTS
2022-23 3,098,582 $ 520,055 $ 740,051 $ 505,863 $ 1,245,914 $ 4,864,551 $ 2023-24 3,262,214 865,904 762,252 580,478 1,342,730 5,470,848 2024-25 3,346,108 697,816 785,121 421,526 1,206,647 5,250,571 2025-26 3,318,842 732,573 808,674 432,559 1,241,233 5,292,648 2026-27 3,348,595 739,202 832,655 444,533 1,277,188 5,364,985 Total 16,374,341 $ 3,555,550 $ 3,928,753 $ 2,384,959 $ 6,313,712 $ 26,243,603 $

DWR COSTS CCWA COSTS
(1) Source: CCWA State Water Cost Ten-Year Projections.

Additional information and complete financial statements for the CCWA are available for public inspection in the Finance Department at City Hall, 735 Anacapa Street, between the hours of 7:30 a.m. and 5:30 p.m., Monday through Thursday.

Cater Treatment Plant Cost Sharing Agreement
In 1978, the City of Santa Barbara entered into a cost sharing agreement with the Carpinteria Valley Water District (Carpinteria) and the Montecito Water District (Montecito) for regional water treatment at the Cater Water Treatment Plant (Treatment Plant). Under the agreement, Carpinteria and Montecito pay for the Treatment Plant operating costs according to each agency’s proportional share of total treated water volumes. Additionally, Carpinteria and Montecito jointly pay for 39.7% of capital maintenance, renewal, and replacement costs.

The Districts also agreed to reimburse the City for a pro rata portion of capital expenses of the Treatment Plant including debt issued by and loans secured by the City to make the capital improvements. The City currently has two loans outstanding with the California State Department of Water Resources for improvements to the Plant (see Note 7) with principal balances outstanding totaling $22,050,200 ($3,286,682 and $18,763,518). Of these loan balances, $3,286,682 is shared by the City of Santa Barbara (60.3%), Carpinteria (20%), and Montecito (19.7%); $12,386,118 is shared by the City of Santa Barbara (75.37%) and Montecito (24.63%); and $6,377,400 is for the City of Santa Barbara (100%) for improvements to the Ortega Groundwater Treatment Plant.

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NOTE 13 JOINT POWER AGREEMENTS (CONTINUED)
Cater Treatment Plant Cost Sharing Agreement (Continued) The Districts repay the City semiannually for the costs of the water treatment improvements plus interest. These repayments by the Districts will be paid through June 30, 2035.

Cachuma Operation and Maintenance Board
The Cachuma Operation and Maintenance Board (COMB) is a California Joint Powers Agency (JPA) formed in 1956 pursuant to an agreement with the Bureau of Reclamation.

The agreement transferred to the Cachuma Member Units the responsibility to operate, repair and maintain all Cachuma Project facilities, except Bradbury Dam, which the Bureau of Reclamation has continued to operate. COMB’s Member Units include Carpinteria Valley Water District, City of Santa Barbara, Goleta Water District, and Montecito Water District. An Amended and Restated Agreement for the Establishment of a Board of Control to Operate and Maintain the Cachuma Project (Cachuma Operation and Maintenance Board) was adopted on May 23, 1996 and amended on September 16, 2003. In October 2018 the COMB JPA Separation Agreement was signed, acknowledging the removal of the Santa Ynez River Water Conservation District Improvement District No. 1 from COMB membership.

COMB is responsible for diversion of water to the South Coast through the Tecolote Tunnel, and operation and maintenance of the South Coast Conduit pipeline, flow control valves, meters, and instrumentation at control stations, and turnouts along the South Coast Conduit and at four regulating reservoirs. COMB coordinates closely with the Bureau of Reclamation and Member Units’ staff to ensure that water supplies meet daily demands. The Fisheries Division of COMB conducts fish monitoring and habitat improvement projects to implement provisions of the October 2000 Lower Santa Ynez River Fish Management Plan. Following is a summary of the preliminary Fiscal Year 2022 year-end COMB expenditures, as presented at the August 22, 2022, COMB Board Meeting:

Operations Division 3,483,428 $
Fisheries Division 1,227,082
Other Interest Expense - Emergency Pump
Facility Project 115
Operations Subtotal 4,710,625 $
Total Fiscal Year 2022 Expenditures 4,710,625 $
Expenditures for Fiscal Year 2022 represent normal costs for operation and maintenance of Cachuma Project facilities, as well as some special projects. The numbers above represent gross expenditures, prior to any revenue offsets from grants or other funds. Expenditures are allocated to Member Units in relation to percentage share of Cachuma Project yield. The City’s share is typically 32.19% for costs apportioned among all Cachuma Member Units, and 35.89% for costs apportioned only among COMB Member Agencies (South Coast Member Units).

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NOTE 13 JOINT POWER AGREEMENTS (CONTINUED)
Cachuma Conservation Release Board
The Cachuma Conservation Release Board (CCRB) is a joint powers agency formed in January 1973 by Carpinteria Valley Water District, the City of Santa Barbara, Goleta Water District, and the Montecito Water District. In January 2011, Carpinteria withdrew its membership. CCRB was established to represent its members in protecting their Cachuma Project water rights and other related interests. CCRB’s activities are funded by its Members, which in turn are funded by their water rate payors.

In 1993, CCRB began development of a Fish Management Plan Program in the Lower Santa Ynez River with many federal, state, and local partners. CCRB was the primary implementing agency of the fisheries program until January 2011. At that time, implementation of the Fish Management Plan was transferred to the Cachuma Operation and Maintenance Board (COMB). Since that time, CCRB has focused on issues related to the Cachuma Project water rights.

The U.S. Bureau of Reclamation, on behalf of the Cachuma Project Member Units, holds the Cachuma Project water right permits, and CCRB is the agency responsible for the actions and decisions relative to the terms and conditions of those permits for CCRB Member Units. These include issues related to downstream releases of water from Cachuma Reservoir for the benefit and protection of steelhead/rainbow trout and their habitats, and protection of the Cachuma Project water supply. Since 2000, CCRB has participated in multiple water rights hearings before the State Water Resources Control Board to establish the Cachuma Project operating parameters necessary to conform to the various parties’ water rights. Since that time CCRB has participated in hearings related to the Final EIR on the water rights issues and continued legal and technical consultation for a new Water Rights Order (WR 2019-148), which the Water Resources Control Board ultimately approved and issued in September 2019. With its issuance, CCRB is now assisting Reclamation in implementing requirements of the Order for the Cachuma Project.

In some instances, the costs for this work are shared with other parties that have similar interests. Following is a summary of preliminary Fiscal Year 2022 year-end CCRB expenditures as of June 30, 2022, for the portion of these activities that CCRB funds, as presented at the August 4, 2022, CCRB Board Meeting:

General and Administrative 228,659 $
Legal Activities 121,667
Consultant Activities 134,297
Total Fiscal Year 2022 Expenditures 484,623 $
CCRB members share costs based on each member’s proportionate share of the total Cachuma Project yield held by CCRB members, resulting in a City cost share percentage of

40.88%, for most items. This represents approximately $198,114 in City costs for Fiscal Year 2022 excluding any offsets from other CCRB income.

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NOTE 14 EMPLOYEE MORTGAGE LOAN ASSISTANCE PROGRAM
On October 2, 2001, the City Council created an Employee Mortgage Loan Assistance Program (EMLAP). The purpose of the program was to help the City attract and retain highly qualified employees by providing assistance in dealing with the high cost of home ownership in the Santa Barbara area. The goals of the program included establishing a more stable workforce and, by promoting local homeownership, reducing commuting distances and times. The program was open to all permanent employees who are “first-time homebuyers” (defined as not having owned a market-rate home on the South Coast of Santa Barbara County within the last three years). Homes purchased under the City’s EMLAP must be located on the South Coast of Santa Barbara County. The City’s EMLAP was structured using a combination of an employee down payment, traditional bank mortgage financing, and City-provided financing as follows:

Employee Down Payment (Minimum) 5 %
Bank-Provided 1st Deed of Trust Loan 80
City-Funded 2nd Deed of Trust Loan (Maximum) 15
Total Financing 100 %
Under the terms of the EMLAP, City participation was limited to a purchase price of $1,250,000. Therefore, the maximum second deed of trust loan available to an employee was $187,500 (15% of $1,250,000). Interest on the City loan is variable, adjusted annually, and is set equal to the most recent quarterly interest rate paid the City for the State of California Local Agency Investment Fund (LAIF rate) balances. The loan is repayable over 15 years, with interest only due for the first five years, converting to a 30-year amortization schedule payable over 10 years with a balloon payment due at the end of 15 years. Payments are made by payroll deduction. To assist the employee, the City also paid up to four points to the bank on the employee’s first deed of trust loan up to $40,000 to “buy down” the interest rate on the first trust deed. The points paid by the City are to be repaid when the second trust deed is refinanced or if the home is sold. However, if the employee maintains continuous employment with the City for five years from the date of the loan, then 25% of the value of the points loan obligation will be forgiven, and after 10 years 50% will be forgiven. Upon termination of employment the second deed of trust loan, and any related points, are payable either on the fifth anniversary of the loan, or 180 days from the last day of employment, whichever is longer.

As of June 30, 2022, the City has $118,353 in employee loans outstanding. The City has loaned all approved funds and is not currently accepting any new applications for EMLAP loans.

NOTE 15 LEASES
Lease Receivable
The City, acting as lessor, leases for the use of land under long-term, noncancelable lease agreements, which expire at various dates through 2043 with an interest rates ranging from

3.5% of 4.5% depending on the length of the lease agreement. During the fiscal year ended June 30, 2022, the City recognized $8,481,490 and $1,802,216 in lease revenue and interest revenue, respectively, pursuant to these agreements.

CITY OF SANTA BARBARA

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
(109)
NOTE 15 LEASES (CONTINUED)
Lease Payable
The City leases equipment and property under noncancelable lease agreements. A portion of these leases are allocated to the Golf Course Enterprise Fund The leases expire at varies dates through 2030 and does not have a renewal option. Total future minimum lease payments are as follows:

Year Ending June 30, Principal Interest Principal Interest 2023 352,522 $ 70,906 $ 69,165 $ 5,063 $
2024 366,978 56,610 71,625 2,603
2025 374,876 41,778 37,528 480
2026 385,344 26,613 4,028 18
2027 302,752 11,963 - -
2028-2030 190,136 10,839 - -
Total 1,972,608 $ 218,709 $ 182,346 $ 8,164 $
Governmental Activities Business-Type Activities
NOTE 16 DEFICIT FUND EQUITY
The following funds had deficit balances as of June 30, 2022:

Self-Insurance Internal Service Fund (11,868,928) $
Postemployment Benefits Internal Service Fund (51,997,649) Clean Energy Enterprise Fund (1,524,518)
Permanent Local Housing Allocation Fund (90,825)
Street Sweeping Fund (12,345)
FEMA Reimbursement Fund (2,815,086)
Street Grant Capital Fund (5,974,580)
Deficit in the Permanent Local Housing Allocation, Street Sweeping, FEMA Reimbursement, and Streets Grants Capital Funds will be eliminated through receipt of revenue in fiscal year 2022. The deficit equity has been created by recognition of reimbursable costs, where payment had not been received by the City within the recognition period for the year ended June 30, 2022. The Clean Energy Enterprise Fund will be funded by charges to other funds in future years. The deficit in the Self Insurance Internal Service Fund represents the present value of future claim payments that are anticipated to be paid in future fiscal years.

The deficit will be funded by increasing charges to other funds in future fiscal years. The deficit in the Postemployment Benefits Internal Service Fund represents the benefit liability of future retiree medical and sick leave benefits. This liability grew significantly in fiscal year 2020-2021 due to the City’s change in healthcare plans to CalPERS medical, which includes a benefit option for retirees age 65 and older, for which the City will incur some costs. The deficit will be funded by increasing charges to other funds in future fiscal years.

CITY OF SANTA BARBARA

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
(110)
NOTE 17 OTHER POSTEMPLOYMENT BENEFITS
The following is a summary of OPEB related items for the year ended June 30, 2022:

Deferred Deferred Total OPEB
Outflows Inflow Liability
Retiree Medical Care Benefits 10,582,594 $ (7,927,033) $ 44,514,642 $ Sick Leave Retiree Benefits 2,360,689 (441,950) 9,410,083 Total 12,943,283 $ (8,368,983) $ 53,924,725 $
Retiree Medical Care Benefits and Implied Subsidy of Retiree Health Insurance Premiums
Plan Description
The City provides a retiree medical insurance contribution benefit, in accordance with employee Memorandum of Understanding, to retired employees. This is a single employer defined benefits OPEB plan. The benefit is applicable to employees who retire from City service and,

1. have at least 10 or 15 years of classified or unclassified service, depending on bargaining unit; or

2. retire from City with an industrial disability.

The City contributes an amount each month toward the purchase of medical insurance for the retiree and his/her spouse or domestic partner registered with the City Clerk or the Secretary of State, if applicable. Eligibility and the monthly amount is determined by the applicable Memorandum of Agreement of the retired employee. The payment is based upon the employees’ years of service up to a maximum of 35 years, multiplied by the annual amount for the respective employee unit.

The City will continue to make its contribution until the retiree reaches age 65 or dies, whichever occurs first, provided however, that if the retiree dies before reaching the age of 65 and there is a surviving spouse or registered domestic partner, the City’s contribution shall cease when the retiree would have reached age 65. Thereafter, the spouse may remain on the insurance plan, at his/her own cost, subject to the conditions set forth by the insurance company.

Beginning January 1, 2020, the City replaced its current medical plans with medical plans offered through CalPERS Health Benefits Program. Contracting agencies such as the City of Santa Barbara are required to provide an employer health contribution toward the cost of the monthly premium for all employees and annuitants. Retirees age 65 or older have the option to purchase a Medicare Supplement plan offered through CalPERS, and the Public Employees’ Medical & Hospital Care Act (PEMHCA) requires the City to make the minimum contributions including administrative fee toward the retiree’s health premium and allows for various contribution methods. This change to the plan resulted in a significant increase to the total OPEB liability for the fiscal year ended June 30, 2021. However, it does not apply to retirees electing Medicare coverage in nonCalPERS medical plans.

CITY OF SANTA BARBARA

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
(111)
NOTE 17 OTHER POSTEMPLOYMENT BENEFITS (CONTINUED)
Retiree Medical Care Benefits and Implied Subsidy of Retiree Health Insurance Premiums (Continued)
Plan Description (Continued)
For the Police bargaining unit only: The City will continue the normal retiree medical allowance past the age of 65 for the six specified employees named in the Police Memorandum of Understanding who retire after December 23, 2006 and thereafter certify, on an annual basis, that they are not eligible to apply for Medicare Part A (hospitalization) coverage on the basis of their City service, other covered employment, through a spouse’s covered employment, or through any other means. The OPEB plan does not have a stand-alone financial report.

In addition to the direct City paid contributions, retirees covered under the City’s plans receive pre-65 benefits that are subsidized as the cost of their coverage is based on blended (active and retiree) premium rates instead of normally higher retiree only rates.

This implicit subsidy is also considered in the valuation for retirees electing City healthcare plan coverage. However, it does not apply to retirees electing coverage in non-City plans.

Employees Covered
As of the June 30, 2022, the following current and former employees were covered by the benefit terms under the plan:

Number of
Covered
Participants
Inactive Currently Receiving Benefits 389
Inactive Entitled to but not yet Receiving Benefits 578 Active Employees* 936
Total 1,903
*Excludes active employees who would not meet service eligibility at age 65.

Contributions
The City currently administers its retiree medical plan. There is no requirement to contribute any amount beyond the pay-as-you-go contributions. If retirees elect medical insurance coverage through the City, the retiree pays the entire cost of the premiums, less the City’s monthly payment to the retiree. The City is evaluating various options for funding the postretirement health benefits liability. The City has not set up a trust for purposes of funding the required retiree medical payments but continues to fund the benefit on a pay-as-you-go basis in the current year.

For the year ended June 30, 2022, cash contributions were $833,805 and the estimated implied subsidy was $460,854 resulting in total payments of $1,294,659.

CITY OF SANTA BARBARA

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
(112)
NOTE 17 OTHER POSTEMPLOYMENT BENEFITS (CONTINUED)
Retiree Medical Care Benefits and Implied Subsidy of Retiree Health Insurance Premiums (Continued)
Total OPEB Liability
The City’s total OPEB liability was measured as of June 30, 2021 for the measurement period July 1, 2020 through June 30, 2021. The total OPEB liability used to calculate the total OPEB liability was determined by an actuarial valuation dated June 30, 2021, based on the following actuarial assumptions.

Actuarial Assumptions
Discount Rate 2.16%
Inflation 2.50%
Salary Increases 2.75% (Merit tables from CalPERS
2000-2019 Experience Study)
Mortality Rate CalPERS 2000-2019 Experience
Study
Mortality Improvement Projected fully generational with Scale MP-2021
Healthcare Trend Rate Non-Medicare -8.50% for 2024,
decreasing to an ultimate rate of

3.45% in 2076 and later years
Discount Rate
The discount rate used to measure the total OPEB liability was 2.16%. The discount rate is based on the bond buyer 20-bond index.

Change in Assumption
The discount rate changed from 2.21% to 2.16%, the inflation rate decreased from

2.75% to 2.50%, PEMHCA participation increased to 50%, demographic assumptions updated to CalPERS 2000-2019 Experience Study, and the mortality improvement scale was updated to Scale MP-2021.

CITY OF SANTA BARBARA

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
(113)
NOTE 17 OTHER POSTEMPLOYMENT BENEFITS (CONTINUED)
Retiree Medical Care Benefits and Implied Subsidy of Retiree Health Insurance Premiums (Continued)
Changes in the Total OPEB Liability
The changes in the total OPEB liability for the plan are as follows:

Total
OPEB Liability
Changes in Total OPEB Liability
(Measurement Period 7/1/20 - 6/30/21)
Service Cost 2,914,906 $
Interest 1,087,405
Actual vs. Expected Experience 2,377,732
Assumption Changes (7,582,037)
Benefit Payments (1,144,612)
Net Changes (2,346,606)
Total OPEB Liability - Beginning of Year 46,861,248
Total OPEB Liability - End of Year 44,514,642 $
Sensitivity of the Total OPEB Liability to Changes in the Discount Rate The following presents the total OPEB liability of the City, as well as what the City’s total OPEB liability would be if it were calculated using a discount rate that is one percentage point higher or one percentage point lower than the current discount rate, for the measurement period June 30, 2021.
1% Decrease Discount Rate 1% Increase
(1.16%) (2.16%) (3.16%)
Total OPEB Liability 51,952,408 $ 44,514,642 $ 38,579,306 $ Sensitivity of the total OPEB liability to changes in the healthcare cost trend rates. The following presents the total OPEB liability of the City, as well as what the City’s total OPEB liability would be if it were calculated using healthcare cost trend rates that are one percentage point higher or one percentage point lower than the current healthcare cost trend rates:
1% Decrease Current Rate 1% Increase
Total OPEB Liability 37,701,652 $ 44,514,642 $ 53,420,573 $ Healthcare Trend Rate

CITY OF SANTA BARBARA

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
(114)
NOTE 17 OTHER POSTEMPLOYMENT BENEFITS (CONTINUED)
Retiree Medical Care Benefits and Implied Subsidy of Retiree Health Insurance Premiums (Continued)
OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB
For the fiscal year ended June 30, 2022, the City recognized OPEB expense of $4,207,970. At June 30, 2022, the City’s deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources:

Deferred Deferred
Outflows of Inflows of
Resources Resources
Changes in Assumptions 7,189,936 $ (7,302,033) $
Differences Between Actual and Expected Experience 2,097,999 (625,000) Employer Contributions Made Subsequent
to the Measurement Date 1,294,659 -
Total 10,582,594 $ (7,927,033) $
June 30, 2021
The $1,294,659 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, 2023. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows:

Year Ending June 30, Amount
2023 $ 200,841
2024 200,841
2025 200,841
2026 283,841
2027 360,841
Thereafter 113,697
Sick Leave Retiree Benefits
Plan Description
The City provides additional retirement benefits based on unused accumulated sick leave to eligible employees who retire with CalPERS pension benefits immediately upon termination of employment from the City. This is a single employer defined benefits OPEB plan. Under this plan, unused accumulated sick leave balances are converted to credited service that is used to provide additional retirement benefits. Annuity benefits are determined based on credited service, final average compensation, and the CalPERS benefit formulas. Employees are eligible for benefits if they terminate employment at a minimum of age 50 and 5 years’ service. Eligibility is applicable to employees who have accrued at least 500 hours of unused sick leave.

CITY OF SANTA BARBARA

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
(115)
NOTE 17 OTHER POSTEMPLOYMENT BENEFITS (CONTINUED)
Sick Leave Retiree Benefits (Continued)
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:

Number of
Covered
Participants
Inactive Currently Receiving Benefits 1
Inactives Entitled to but not yet Receiving Benefits -
Active Employees 929
Total 930
Contributions
The City has not set up a trust for purposes of funding the required sick leave retiree benefits but continues to fund the benefit on a pay-as-you-go basis in the current year.

The City is evaluating various options for funding the postretirement benefits liability.

For the year ended June 30, 2022, cash contributions were $850,860.

Total OPEB Liability
The City’s total OPEB liability was measured as of June 30, 2021 for the measurement period July 1, 2020 through June 30, 2021. The total OPEB liability used to calculate the total OPEB liability was determined by an actuarial valuation dated June 30, 2021, based on the following actuarial assumptions.

Actuarial Assumptions
Discount Rate 2.16%
Inflation 2.50%
Salary Increases 2.75% (Merit tables from CalPERS
2000-2019 Experience Study)
Mortality Rate CalPERS 2000-2019 Experience
Study
Mortality Improvement Projected fully generational with Scale MP-2021
Healthcare Trend Rate Benefit is not dependent on
healthcare trend
Discount Rate
The discount rate used to measure the total OPEB liability was 2.16%. The discount rate is based on the bond buyer 20-bond index.

CITY OF SANTA BARBARA

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
(116)
NOTE 17 OTHER POSTEMPLOYMENT BENEFITS (CONTINUED)
Sick Leave Retiree Benefits (Continued)
Change in Assumption
The discount rate changed from 2.21% to 2.16%, the inflation rate decreased from

2.75% to 2.50%, demographic assumptions updated to CalPERS 2000-2019 Experience Study, and the mortality improvement scale was updated to Scale MP2021.

Change of Benefit Terms
Fire and Fire management eligible for Plan benefits at retirement.

Changes in the Total OPEB Liability
The changes in the total OPEB liability for the plan are as follows:

Total OPEB
Liability
Changes in Total OPEB Liability
(Measurement Period 7/1/20 - 6/30/21)
Service Cost $ 565,386
Interest 162,185
Changes of Benefit Terms 1,474,847
Actual vs. Expected Experience 1,099,518
Assumption Changes (122,511)
Benefit Payments (1,085,312)
Net Changes 2,094,113
Total OPEB Liability - Beginning of Year 7,315,970
Total OPEB Liability - End of Year $ 9,410,083
Sensitivity of the Total OPEB Liability to Changes in the Discount Rate The following presents the total OPEB liability of the City, as well as what the City’s total OPEB liability would be if it were calculated using a discount rate that is one percentage point higher or one percentage point lower than the current discount rate, for the measurement period June 30, 2021:
1% Decrease Current Rate 1% Increase
(1.16%) (2.16%) (3.16%)
Total OPEB Liability 9,905,601 $ 9,410,083 $ 8,930,398 $ Discount Rate
Sensitivity of the Total OPEB Liability to Changes in the Healthcare Cost Trend Rates The benefit is not dependent on healthcare trend rates.

CITY OF SANTA BARBARA

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
(117)
NOTE 17 OTHER POSTEMPLOYMENT BENEFITS (CONTINUED)
Actuarial Assumptions
OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB
For the fiscal year ended June 30, 2022, the City recognized OPEB expense of $2,293,632. At June 30, 2022, the City’s deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources:

Deferred Deferred
Outflows of Inflows of
Resources Resources
Changes in Assumptions 505,097 $ (321,950) $
Differences Between Actual and Expected Experience 1,004,732 (120,000) Employer Contributions Made Subsequent
to the Measurement Date 850,860 -
Total 2,360,689 $ (441,950) $
June 30, 2021
The $850,860 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 June 30, 2023. Other amounts reported as deferred outflows and deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows:

Year Ending June 30, Amount
2023 $ 91,214
2024 91,214
2025 91,214
2026 91,214
2027 91,214
Thereafter 611,809
(118)

REQUIRED SUPPLEMENTARY INFORMATION

CITY OF SANTA BARBARA

SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS

SAFETY RETIREMENT AND SAFETY SERVICE RETIREMENT PLANS
LAST TEN FISCAL YEARS*
See accompanying Notes to Required Supplementary Information. (119)
Fiscal Year Ended June 30, 2022 June 30, 2021 June 30, 2020 June 30, 2019 Measurement Period Ended June 30, 2021 June 30, 2020 June 30, 2019 June 30, 2018 Total Pension Liability:

Interest on total pension liability $ 6,130 3,124 $ 7,135 $ 8,117 $ Differences between expected and actual
experience (16,140) (10,704) 23,260 (4,543)
Changes in assumptions (1,370) 5,666 809 (2,865)
Changes in benefits - - - -
Benefit payments, including refunds
of employee contributions (31,152) (38,631) (42,216) (43,905) Net Change in Total Pension Liability (37,539) (45,538) (11,012) (43,196) Total Pension Liability - Beginning of Year 156,930 194,469 205,481 248,677 Total Pension Liability - End of Year (a) 111,392 $ 156,930 $ 194,469 $ 205,481 $ Plan Fiduciary Net Position:

Contributions - employer - $ - $ - $ - $
Contributions - employee - - - -
Net investment income - - - -
Benefit payments - - - -
Net Change in Plan Fiduciary Net Position - - - -
Plan Fiduciary Net Position - Beginning of Year - - - - Plan Fiduciary Net Position - End of Year (b) - $ - $ - $ - $ Total Pension Liability - Ending (a)-(b) 111,392 $ 156,930 $ 194,469 $ 205,481 $ Plan fiduciary net position as a percentage
of the total pension liability 0.00% 0.00% 0.00% 0.00%
Covered payroll N/A N/A N/A N/A
Net pension liability as percentage of
covered payroll N/A N/A N/A N/A
Notes to Schedule:

Changes in Assumptions:

From fiscal year June 30, 2020 to June 30, 2021:

The discount rate was reduced from 3.5% to 2.21%.

From fiscal year June 30, 2021 to June 30, 2022:

The discount rate was reduced from 2.21% to 2.16%.

During the fiscal year ended June 30, 2017, the safety service retirement plan trust was closed. * Fiscal year 2014 was the first year of implementation and therefore only nine years are shown.

CITY OF SANTA BARBARA

SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS

SAFETY RETIREMENT AND SAFETY SERVICE RETIREMENT PLANS (CONTINUED) LAST TEN FISCAL YEARS*
See accompanying Notes to Required Supplementary Information. (120)
Fiscal Year Ended June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015 June 30, 2014 Measurement Period Ended June 30, 2017 June 30, 2016 June 30, 2015 June 30, 2014 June 30, 2013 Total Pension Liability:

Interest on total pension liability $ 38,189 16,437 $ 58,515 $ 63,008 $ 277,220 $ Differences between expected and actual
experience 26,062 41,577 (237,062) - -
Changes in assumptions (13,101) 64,419 42,874 - -
Changes in benefits (416,227) (227,990) 54,434 - -
Benefit payments, including refunds
of employee contributions (90,589) (116,087) (113,370) (173,700) (175,058) Net Change in Total Pension Liability (199,892) (477,418) (194,609) (110,692) 102,162 Total Pension Liability - Beginning of Year 726,095 925,987 1,120,596 1,231,288 1,129,126 Total Pension Liability - End of Year (a) 248,677 $ 726,095 $ 925,987 $ 1,120,596 $ 1,231,288 $ Plan Fiduciary Net Position:

Contributions - employer 48,972 $ 48,972 $ 49,611 $ 102,126 $ 96,992 $ Contributions - employee - - - - -
Net investment income 4,392 28,595 1,123 62,733 36,741
Benefit payments (506,816) (116,087) (113,370) (173,700) (175,058) Net Change in Plan Fiduciary Net Position (453,452) (38,520) (62,636) (8,841) (41,325) Plan Fiduciary Net Position - Beginning of Year 453,452 491,972 554,608 563,449 604,774 Plan Fiduciary Net Position - End of Year (b) - $ 453,452 $ 491,972 $ 554,608 $ 563,449 $ Net Pension Liability - Ending (a)-(b) 248,677 $ 272,643 $ 434,015 $ 565,988 $ 667,839 $ Plan fiduciary net position as a percentage
of the total pension liability 0.00% 62.45% 53.13% 49.49% 45.76% Covered payroll N/A N/A N/A N/A N/A
Net pension liability as percentage of
covered payroll N/A N/A N/A N/A N/A
Notes to Schedule:

Changes in Assumptions:

From fiscal year June 30, 2020 to June 30, 2021:

The discount rate was reduced from 3.5% to 2.21%.

From fiscal year June 30, 2021 to June 30, 2022:

The discount rate was reduced from 2.21% to 2.16%.

During the fiscal year ended June 30, 2017, the safety service retirement plan trust was closed. * Fiscal year 2014 was the first year of implementation and therefore only nine years are shown.

CITY OF SANTA BARBARA

SCHEDULE OF CONTRIBUTIONS

SAFETY RETIREMENT AND SAFETY SERVICE RETIREMENT PLANS
LAST TEN FISCAL YEARS*
See accompanying Notes to Required Supplementary Information. (121)
Fiscal year ended June 30, 2022 June 30, 2021 June 30, 2020 June 30, 2019 Actuarially determined contribution 26,232 $ 31,152 $ 38,631 $ 42,216 $ Contributions in relation to the
actuarially determined contributions (26,232) (31,152) (38,631) (42,216) Contribution deficiency (excess) - $ - $ - $ - $
Covered payroll N/A N/A N/A N/A
Notes to Schedule:

During the fiscal year ended June 30, 2017, the safety service retirement plan trust was closed. * Fiscal year 2014 was the first year of implementation and therefore only nine years are shown.

CITY OF SANTA BARBARA

SCHEDULE OF CONTRIBUTIONS

SAFETY RETIREMENT AND SAFETY SERVICE RETIREMENT PLANS (CONTINUED) LAST TEN FISCAL YEARS*
See accompanying Notes to Required Supplementary Information. (122)
Fiscal year ended June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015 June 30, 2014 Actuarially determined contribution 43,905 $ 48,972 $ 49,611 $ 108,000 $ 105,000 $ Contributions in relation to the
actuarially determined contributions (43,905) (48,972) (49,611) (104,000) (97,000) Contribution deficiency (excess) - $ - $ - $ 4,000 $ 8,000 $ Covered payroll N/A N/A N/A N/A N/A
Notes to Schedule:

During the fiscal year ended June 30, 2017, the safety service retirement plan trust was closed. * Fiscal year 2014 was the first year of implementation and therefore only nine years are shown. (123)

CITY OF SANTA BARBARA

SCHEDULE OF INVESTMENT RETURNS

SAFETY RETIREMENT AND SAFETY SERVICE RETIREMENT PLANS
LAST TEN FISCAL YEARS*
See accompanying Notes to Required Supplementary Information. (124)
Measurement Date 2013 2014 2015 2016 2017 2018 2019 2020 2021 Annual money-weighted rate of
return, net of investment expense 11.82% 11.82% 6.40% 0% 0% 0% 0% 0% 0% Notes to Schedule:

During the fiscal year ended June 30, 2017, the safety service retirement plan trust was closed.

CITY OF SANTA BARBARA

SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS

CALPERS MISCELLANEOUS PENSION PLANS
LAST TEN FISCAL YEARS*
See accompanying Notes to Required Supplementary Information. (125)
Fiscal Year Ended June 30, 2022 June 30, 2021 June 30, 2020 Measurement Period Ended June 30, 2021 June 30, 2020 June 30, 2019 Total Pension Liability:

Service cost 10,993,296 $ 11,117,944 $ 11,242,442 $
Interest on total pension liability 44,176,368 45,902,084 42,609,454 Differences between expected and actual
experience 1,483,308 (1,621,002) 5,289,518
Changes in assumptions - - -
Changes in benefits - - -
Benefit payments, including refunds
of employee contributions (33,626,670) (31,532,186) (28,975,301) Net Change in Total Pension Liability 22,141,124 24,752,018 30,166,113 Total Pension Liability - Beginning of Year 651,820,561 629,679,437 599,513,324 Total Pension Liability - End of Year (a) 676,572,579 $ 651,820,561 $ 629,679,437 $ Plan Fiduciary Net Position:

Contributions - employer $ 19,279,801 20,887,408 $ 17,336,444 $ Contributions - employee 6,252,846 6,253,457 5,841,003
Net investment income 106,462,271 22,662,797 28,408,000 Benefit payments (33,626,670) (31,532,186) (28,975,301) Plan to plan resource movement - - -
Administrative expense (467,575) (637,272) (306,672)
Other miscellaneous income (expense) - - 999
Net Change in Plan Fiduciary Net Position 99,508,280 16,026,597 22,304,473 Plan Fiduciary Net Position - Beginning of Year 468,071,367 452,044,770 429,740,297 Plan Fiduciary Net Position - End of Year (b) 567,579,647 $ 468,071,367 $ 452,044,770 $ Net Pension Liability - Ending (a)-(b) 108,992,932 $ 183,749,194 $ 177,634,667 $ Plan fiduciary net position as a percentage
of the total pension liability 83.89% 71.81% 71.79%
Covered payroll 59,925,660 $ 59,948,680 $ 58,650,784 $
Net pension liability as percentage of
covered payroll 181.88% 306.51% 302.87%
Notes to Schedule:

Benefit Changes:

There were no changes in benefits.

Changes in Assumptions:

From fiscal year June 30, 2015 to June 30, 2016:
rate of 7.65% used for the June 30, 2015 measurement date is without reduction of pension plan administrative expense.

From fiscal year June 30, 2016 to June 30, 2017:

There were no changes in assumptions.

From fiscal year June 30, 2017 to June 30, 2018:

The discount rate was reduced from 7.65% to 7.15%.

From fiscal year June 30, 2018 to June 30, 2019:

Inflation was reduced from 2.75% to 2.50%.

From fiscal year June 30, 2019 to June 30, 2020:

There were no significant changes in assumptions.

From fiscal year June 30, 2020 to June 30, 2021:

There were no significant changes in assumptions.

From fiscal year June 30, 2021 to June 30, 2022:

There were no significant changes in assumptions.
* Fiscal year 2015 was the first year of implementation and therefore only eight years are shown. expense. The discount rate of 7.50% used for the June 30, 2014 measurement date was net of administrative expenses. The discount GASB 68, paragraph 68 states that the long-term expected rate of return should be determined net of pension plan investment expense but without

CITY OF SANTA BARBARA

SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS

CALPERS MISCELLANEOUS PENSION PLANS (CONTINUED)
LAST TEN FISCAL YEARS*
See accompanying Notes to Required Supplementary Information. (126)
Fiscal Year Ended June 30, 2019 June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015 Measurement Period Ended June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015 June 30, 2014 Total Pension Liability:

Service cost 10,848,882 $ 10,827,663 $ 9,760,428 $ 9,563,623 $ 9,676,642 $ Interest on total pension liability 39,079,614 40,531,753 37,902,710 36,129,828 34,649,348 Differences between expected and actual
experience (291,764) (5,119,771) (132,903) (4,360,012) - Changes in assumptions (3,358,919) 32,405,333 - (8,848,255) - Changes in benefits - - - - -
Benefit payments, including refunds
of employee contributions (26,641,065) (25,274,088) (23,474,988) (21,493,097) (20,041,269) Net Change in Total Pension Liability 51,918,751 21,088,887 24,055,247 10,992,087 24,284,721 Total Pension Liability - Beginning of Year 578,424,437 526,505,686 502,450,439 491,458,352 467,173,631 Total Pension Liability - End of Year (a) 599,513,324 $ 578,424,437 $ 526,505,686 $ 502,450,439 $ 491,458,352 $ Plan Fiduciary Net Position:

Contributions - employer 15,654,944 $ 14,693,333 $ 14,184,385 $ 13,162,072 $ 11,373,020 $ Contributions - employee 5,249,989 5,071,882 4,988,705 4,833,301 4,587,261 Net investment income 34,092,665 40,908,639 2,007,173 8,218,938 54,806,585 Benefit payments (26,641,065) (25,274,088) (23,474,988) (21,493,097) (20,041,269) Plan to plan resource movement (999) (10,124) - (1,157) - Administrative expense (628,306) (543,859) (226,033) (435,768) - Other miscellaneous income (expense) (1,193,164) - - - - Net Change in Plan Fiduciary Net Position 26,534,064 34,845,783 (2,520,758) 4,284,289 50,725,597 Plan Fiduciary Net Position - Beginning of Year 403,206,233 368,360,450 370,881,208 366,596,919 315,871,322 Plan Fiduciary Net Position - End of Year (b) 429,740,297 $ 403,206,233 $ 368,360,450 $ 370,881,208 $ 366,596,919 $ Net Pension Liability - Ending (a)-(b) 169,773,027 $ 175,218,204 $ 158,145,236 $ 131,569,231 $ 124,861,433 $ Plan fiduciary net position as a percentage
of the total pension liability 71.68% 69.71% 69.96% 73.81% 74.59% Covered payroll 57,069,164 $ 55,884,714 $ 55,485,351 $ 53,022,251 $ 50,588,866 $ Net pension liability as percentage of
covered payroll 297.49% 313.54% 285.02% 248.14% 246.82% Notes to Schedule:

Benefit Changes:

There were no changes in benefits.

Changes in Assumptions:

From fiscal year June 30, 2015 to June 30, 2016:

GASB 68, paragraph 68 states that the long-term expected rate of return should be determined net of pension plan investment expense but without reduction for pension plan administrative expense. The discount rate of 7.50% used for the June 30, 2014 measurement date was net of administrative expenses. The discount rate of 7.65% used for the June 30, 2015 measurement date is without reduction of pension plan administrative expense.

From fiscal year June 30, 2016 to June 30, 2017:

There were no changes in assumptions.

From fiscal year June 30, 2017 to June 30, 2018:

The discount rate was reduced from 7.65% to 7.15%.

From fiscal year June 30, 2018 to June 30, 2019:

Inflation was reduced from 2.75% to 2.50%.

From fiscal year June 30, 2019 to June 30, 2020:

There were no significant changes in assumptions.

From fiscal year June 30, 2020 to June 30, 2021:

There were no significant changes in assumptions.

From fiscal year June 30, 2021 to June 30, 2022:

There were no significant changes in assumptions.
* Fiscal year 2015 was the first year of implementation and therefore only eight years are shown.

CITY OF SANTA BARBARA

SCHEDULE OF CONTRIBUTIONS

CALPERS MISCELLANEOUS PENSION PLANS
LAST TEN FISCAL YEARS*
See accompanying Notes to Required Supplementary Information. (127)
Fiscal year ended June 30, 2022 June 30, 2021 June 30, 2020 Actuarially determined contribution 23,966,588 $ 20,836,231 $ 19,206,093 $ Contributions in relation to the
actuarially determined contributions (23,966,588) (20,836,231) (19,206,093) Contribution deficiency (excess) - $ - $ - $
Covered payroll 61,614,977 $ 59,925,660 $ 59,948,680 $
Contributions as a percentage of covered
payroll 38.90% 34.77% 32.04%
Notes to Schedule:

Valuation Date 6/30/2019 6/30/2018 6/30/2017
Methods and Assumptions Used to Determine Contribution Rates:

Actuarial cost method Entry age Entry age Entry age
Amortization method (1) (1) (1)
Asset valuation method Fair Value Fair Value Fair Value Inflation 2.500% 2.500% 2.625%
Salary increases (2) (2) (2)
Investment rate of return 7.00% (3) 7.00% (3) 7.25% (3) Retirement age (4) (4) (4)
Mortality (5) (5) (5)
(1) Level percentage of payroll, closed.
(2) Depending on age, service and type of employment.
(3)Net of pension plan investment expense, including inflation. (4) The probabilities of retirement are based on the 2010 CalPERS Experience Study report. (5) Mortality assumptions are based on mortality rates resulting from the most recent CalPERS Experience Study adopted by the CalPERS Board.
* Fiscal year 2015 was the first year of implementation and therefore only eight years are shown.

CITY OF SANTA BARBARA

SCHEDULE OF CONTRIBUTIONS

CALPERS MISCELLANEOUS PENSION PLANS (CONTINUED)
LAST TEN FISCAL YEARS*
See accompanying Notes to Required Supplementary Information. (128)
Fiscal year ended June 30, 2019 June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015 Actuarially determined contribution 17,247,341 $ 15,613,850 $ 14,693,333 $ 14,184,385 $ 13,162,072 $ Contributions in relation to the
actuarially determined contributions (17,247,341) (15,613,850) (14,693,333) (14,184,385) (13,162,072) Contribution deficiency (excess) - $ - $ - $ - $ - $
Covered payroll 58,650,784 $ 57,069,164 $ 55,884,714 $ 55,485,351 $ 53,022,251 $ Contributions as a percentage of covered
payroll 29.41% 27.36% 26.29% 25.56% 24.82%
Notes to Schedule:

Valuation Date 6/30/2016 6/30/2015 6/30/2014 6/30/2013 6/30/2012 Methods and Assumptions Used to Determine Contribution Rates:

Actuarial cost method Entry age Entry age Entry age Entry age Entry age Amortization method (1) (1) (1) (1) (1)
Asset valuation method Fair Value Fair Value Fair Value Fair Value 15-Year Smoothed
Market Method
Inflation 2.75% 2.75% 2.75% 2.75% 2.75%
Salary increases (2) (2) (2) (2) (2)
Investment rate of return 7.375% (3) 7.50% (3) 7.50% (3) 7.50% (3) 7.50% (3) Retirement age (4) (4) (4) (4) (4)
Mortality (5) (5) (5) (5) (5)
(1) Level percentage of payroll, closed.
(2) Depending on age, service and type of employment.
(3)Net of pension plan investment expense, including inflation. (4) The probabilities of retirement are based on the 2010 CalPERS Experience Study report. (5) Mortality assumptions are based on mortality rates resulting from the most recent CalPERS Experience Study adopted by the CalPERS Board.
* Fiscal year 2015 was the first year of implementation and therefore only eight years are shown.

CITY OF SANTA BARBARA

SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS

CALPERS SAFETY POLICE PENSION PLANS
LAST TEN FISCAL YEARS*
See accompanying Notes to Required Supplementary Information. (129)
Fiscal Year Ended June 30, 2022 June 30, 2021 June 30, 2020 Measurement Period Ended June 30, 2021 June 30, 2020 June 30, 2019 Total Pension Liability:

Service cost 5,132,860 $ 5,127,183 $ 5,038,115 $
Interest on total pension liability 20,289,464 20,991,410 19,515,209 Differences between expected and actual
experience 422,522 1,353,894 -
Changes in assumptions - - 1,774,631
Changes in benefits - - -
Benefit payments, including refunds
of employee contributions (16,321,634) (15,727,551) (14,518,454) Net Change in Total Pension Liability 11,042,990 10,225,158 11,809,501 Total Pension Liability - Beginning of Year 298,758,010 287,715,020 275,905,519 Total Pension Liability - End of Year (a) 308,983,168 $ 298,758,010 $ 287,715,020 $ Plan Fiduciary Net Position:

Contributions - employer $ 9,073,135 9,754,764 $ 8,168,274 $ Contributions - employee 1,720,503 1,840,823 1,606,426
Net investment income 45,022,492 9,697,393 12,279,660
Benefit payments (16,321,634) (15,727,551) (14,518,454) Plan to plan resource movement - - -
Administrative expense (198,742) (273,976) (133,404)
Other miscellaneous income (expense) - - 436
Net Change in Plan Fiduciary Net Position 39,977,383 4,609,824 7,402,938 Plan Fiduciary Net Position - Beginning of Year 198,952,763 194,342,939 186,940,001 Plan Fiduciary Net Position - End of Year (b) 238,930,146 $ 198,952,763 $ 194,342,939 $ Net Pension Liability - Ending (a)-(b) 70,053,022 $ 99,805,247 $ 93,372,081 $ Plan fiduciary net position as a percentage
of the total pension liability 77.33% 66.59% 67.55%
Covered payroll 15,924,804 $ 16,359,278 $ 16,273,075 $
Net pension liability as percentage of
covered payroll 439.90% 610.08% 573.78%
Notes to Schedule:

Benefit Changes:

There were no changes in benefits.

Changes in Assumptions:

From fiscal year June 30, 2015 to June 30, 2016:

GASB 68, paragraph 68 states that the long-term expected rate of return should be determined net of pension plan investment expense but without reduction for pension plan administrative expense. The discount rate of 7.50% used for the June 30, 2014 measurement date was net of administrative expenses. The discount rate of 7.65% used for the June 30, 2015 measurement date is without reduction of pension plan administrative expense.

From fiscal year June 30, 2016 to June 30, 2017:

There were no changes in assumptions.

From fiscal year June 30, 2017 to June 30, 2018:

The discount rate was reduced from 7.65% to 7.15%.

From fiscal year June 30, 2018 to June 30, 2019:

Inflation was reduced from 2.75% to 2.50%.

From fiscal year June 30, 2019 to June 30, 2020:

There were no significant changes in assumptions.

From fiscal year June 30, 2020 to June 30, 2021:

There were no significant changes in assumptions.

From fiscal year June 30, 2021 to June 30, 2022:

There were no significant changes in assumptions.
* Fiscal year 2015 was the first year of implementation and therefore only eight years are shown.

CITY OF SANTA BARBARA

SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS

CALPERS SAFETY POLICE PENSION PLANS (CONTINUED)
LAST TEN FISCAL YEARS*
See accompanying Notes to Required Supplementary Information. (130)
Fiscal Year Ended June 30, 2019 June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015 Measurement Period Ended June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015 June 30, 2014 Total Pension Liability:

Service cost 4,857,235 $ 4,491,601 $ 4,497,742 $ 5,010,613 $ 5,186,081 $ Interest on total pension liability 17,958,387 18,703,388 17,452,394 16,967,585 16,640,662 Differences between expected and actual
experience 2,285,455 (1,701,292) (4,101,607) (7,448,519) - Changes in assumptions (1,262,820) 15,186,679 - (4,242,689) - Changes in benefits - - - - -
Benefit payments, including refunds
of employee contributions (13,624,691) (12,846,960) (11,957,196) (10,608,382) (9,641,215) Net Change in Total Pension Liability 23,088,415 10,958,567 5,891,333 (321,392) 12,185,528 Total Pension Liability - Beginning of Year 264,946,952 241,858,537 235,967,204 236,288,596 224,103,068 Total Pension Liability - End of Year (a) 275,905,519 $ 264,946,952 $ 241,858,537 $ 235,967,204 $ 236,288,596 $ Plan Fiduciary Net Position:

Contributions - employer 7,279,784 $ 6,100,953 $ 5,502,842 $ 5,729,090 $ 5,811,400 $ Contributions - employee 1,434,341 1,408,892 1,366,145 1,462,940 1,514,918 Net investment income 14,936,635 18,139,466 934,079 3,780,559 25,268,419 Benefit payments (13,624,691) (12,846,960) (11,957,196) (10,608,382) (9,641,215) Plan to plan resource movement (436) 10,605 - (3,426) - Administrative expense (276,932) (243,830) (103,244) (184,197) - Other miscellaneous income (expense) (525,899) - - - -
Net Change in Plan Fiduciary Net Position 9,222,802 12,569,126 (4,257,374) 176,584 22,953,522 Plan Fiduciary Net Position - Beginning of Year 177,717,199 165,148,073 169,405,447 169,228,863 146,281,803 Plan Fiduciary Net Position - End of Year (b) 186,940,001 $ 177,717,199 $ 165,148,073 $ 169,405,447 $ 169,235,325 $ Net Pension Liability - Ending (a)-(b) 88,965,518 $ 87,229,753 $ 76,710,464 $ 66,561,757 $ 67,053,271 $ Plan fiduciary net position as a percentage
of the total pension liability 67.76% 67.08% 68.28% 71.79% 71.62% Covered payroll 15,669,261 $ 14,020,481 $ 15,555,046 $ 17,232,219 $ 17,126,518 $ Net pension liability as percentage of
covered payroll 567.77% 622.16% 493.15% 386.26% 391.52% Notes to Schedule:

Benefit Changes:

There were no changes in benefits.

Changes in Assumptions:

From fiscal year June 30, 2015 to June 30, 2016:

GASB 68, paragraph 68 states that the long-term expec
without reduction for pension plan administrative expense. The discount rate of 7.50% used for the June 30, 2014 measurement date was net of administrative expenses. The discount rate of 7.65% used for the June 30, 2015 measurement date is without reduction of pension plan administrative expense.

From fiscal year June 30, 2016 to June 30, 2017:

There were no changes in assumptions.

From fiscal year June 30, 2017 to June 30, 2018:

The discount rate was reduced from 7.65% to 7.15%.

From fiscal year June 30, 2018 to June 30, 2019:

Inflation was reduced from 2.75% to 2.50%.

From fiscal year June 30, 2019 to June 30, 2020:

There were no significant changes in assumptions.

From fiscal year June 30, 2020 to June 30, 2021:

There were no significant changes in assumptions.

From fiscal year June 30, 2021 to June 30, 2022:

There were no significant changes in assumptions.
* Fiscal year 2015 was the first year of implementation and therefore only eight years are shown.

CITY OF SANTA BARBARA

SCHEDULE OF CONTRIBUTIONS

CALPERS SAFETY POLICE PENSION PLANS
LAST TEN FISCAL YEARS*
See accompanying Notes to Required Supplementary Information. (131)
Fiscal year ended June 30, 2022 June 30, 2021 June 30, 2020 Actuarially determined contribution 10,508,925 $ 9,753,264 $ 9,081,466 $ Contributions in relation to the
actuarially determined contributions (10,508,925) (9,753,264) (9,081,466) Contribution deficiency (excess) - $ - $ - $
Covered payroll 15,488,312 $ 15,924,804 $ 16,359,278 $
Contributions as a percentage of covered payroll 67.85% 61.25% 55.51% Notes to Schedule:

Valuation Date 6/30/2018 6/30/2018 6/30/2017
Methods and Assumptions Used to Determine Contribution Rates:

Actuarial cost method Entry age Entry age Entry age
Amortization method (1) (1) (1)
Asset valuation method Fair Value Fair Value Fair Value Inflation 2.500% 2.500% 2.625%
Salary increases (2) (2) (2)
Investment rate of return 7.00% (3) 7.00% (3) 7.25% (3) Retirement age (4) (4) (4)
Mortality (5) (5) (5)
(1) Level percentage of payroll, closed.
(2) Depending on age, service and type of employment.
(3) Net of pension plan investment expense, including inflation. (4) The probabilities of retirement are based on the 2010 CalPERS Experience Study report. (5) Mortality assumptions are based on mortality rates resulting from the most recent CalPERS Experience Study adopted by the CalPERS Board.
* Fiscal year 2015 was the first year of implementation and therefore only eight years are shown.

CITY OF SANTA BARBARA

SCHEDULE OF CONTRIBUTIONS

CALPERS SAFETY POLICE PENSION PLANS (CONTINUED)
LAST TEN FISCAL YEARS*
See accompanying Notes to Required Supplementary Information. (132)
Fiscal year ended June 30, 2019 June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015 Actuarially determined contribution 8,203,564 $ 7,293,109 $ 6,100,953 $ 5,502,842 $ 5,729,090 $ Contributions in relation to the
actuarially determined contributions (8,203,564) (7,293,109) (6,100,953) (5,502,842) (5,729,090) Contribution deficiency (excess) - $ - $ - $ - $ - $
Covered payroll 16,273,075 $ 15,669,261 $ 14,020,481 $ 15,555,046 $ 17,232,219 $ Contributions as a percentage of covered payroll 24.16% 46.54% 43.51% 35.38% 33.25% Notes to Schedule:

Valuation Date 6/30/2016 6/30/2015 6/30/2014 6/30/2013 6/30/2012 Methods and Assumptions Used to Determine Contribution Rates:

Actuarial cost method Entry age Entry age Entry age Entry age Entry age Amortization method (1) (1) (1) (1) (1)
Asset valuation method Fair Value Fair Value Fair Value Fair Value 15-Year Smoothed
Market Method
Inflation 2.75% 2.75% 2.75% 2.75% 2.75%
Salary increases (2) (2) (2) (2) (2)
Investment rate of return 7.375% (3) 7.50% (3) 7.50% (3) 7.50% (3) 7.50% (3) Retirement age (4) (4) (4) (4) (4)
Mortality (5) (5) (5) (5) (5)
(1) Level percentage of payroll, closed.
(2) Depending on age, service and type of employment.
(3) Net of pension plan investment expense, including inflation. (4) The probabilities of retirement are based on the 2010 CalPERS Experience Study report. (5) Mortality assumptions are based on mortality rates resulting from the most recent CalPERS Experience Study adopted by the CalPERS Board.
* Fiscal year 2015 was the first year of implementation and therefore only eight years are shown.

CITY OF SANTA BARBARA
SCHEDULE OF THE CITY’S PROPORTIONATE SHARE OF THE PLAN’S NET PENSION LIABILITY

AND RELATED RATIOS AS OF THE MEASUREMENT DATE
SAFETY FIRE – COST SHARING PLAN
LAST TEN YEARS*
See accompanying Notes to Required Supplementary Information. (133)
Fiscal Year Ended June 30, 2022 June 30, 2021 June 30, 2020 Measurement Period Ended June 30, 2021 June 30, 2020 June 30, 2019 Plan’s proportion of the net pension liability/(asset) 0.6843% 0.1714% 0.1737% Plan’s proportionate share of the net pension
liability/(asset) 59,108,788 $ 78,043,509 $ 73,267,837 $ Plan’s covered payroll $ 11,236,079 11,458,176 $ 11,685,352 $ Plan’s proportionate share of the net pension
liability/(asset) as a percentage of its
covered payroll 515.87% 694.58% 627.01%
Plan’s proportionate share of the fiduciary net
position as a percentage of the Plan’s
total pension liability 72.47% 62.55% 75.26%
Notes to Schedule:

Benefit Changes:

There were no changes in benefits.

Changes in Assumptions:

From fiscal year June 30, 2015 to June 30, 2016:

GASB 68, paragraph 68 states that the long-term expected rate of return should be determined net of pension plan investment expense but without reduction for pension plan administrative expense. The discount rate of 7.50% used for the June 30, 2014 measurement date was net of administrative expenses. The discount rate of 7.65% used for the June 30, 2015 measurement date is without reduction of pension plan administrative expense.

From fiscal year June 30, 2016 to June 30, 2017:

There were no changes in assumptions.

From fiscal year June 30, 2017 to June 30, 2018:

The discount rate was reduced from 7.65% to 7.15%.

From fiscal year June 30, 2018 to June 30, 2019:

There were no significant changes in assumptions.

From fiscal year June 30, 2019 to June 30, 2020:

There were no changes in assumptions.

From fiscal year June 30, 2020 to June 30, 2021:

There were no changes in assumptions.

From fiscal year June 30, 2021 to June 30, 2022:

There were no changes in assumptions.
* Fiscal year 2015 was the first year of implementation and therefore only eight years are shown.

CITY OF SANTA BARBARA
SCHEDULE OF THE CITY’S PROPORTIONATE SHARE OF THE PLAN’S NET PENSION LIABILITY

AND RELATED RATIOS AS OF THE MEASUREMENT DATE
SAFETY FIRE – COST SHARING PLAN (CONTINUED)
LAST TEN YEARS*
See accompanying Notes to Required Supplementary Information. (134)
June 30, 2019 June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015 Fiscal Year Ended June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015 June 30, 2014 Plan’s proportion of the net pension liability/(asset) 0.7171% 1.1421% 1.1758% 1.2449% 0.7390% Plan’s proportionate share of the net pension
liability/(asset) 69,104,402 $ 68,239,700 $ 60,895,072 $ 51,295,415 $ 45,980,620 $ Plan’s covered payroll 11,156,660 $ 10,848,464 $ 10,699,018 $ 10,382,054 $ 10,161,327 $ Plan’s proportionate share of the net pension
liability/(asset) as a percentage of its
covered payroll 619.40% 629.03% 569.17% 494.08% 452.51% Plan’s proportionate share of the fiduciary net
position as a percentage of the Plan’s
total pension liability 75.26% 68.81% 75.87% 79.82% 78.40% Notes to Schedule:

Benefit Changes:

There were no changes in benefits.

Changes in Assumptions:

From fiscal year June 30, 2015 to June 30, 2016:

GASB 68, paragraph 68 states that the long-term expec
without reduction for pension plan administrative expense. The discount rate of 7.50% used for the June 30, 2014 measurement date was net of administrative expenses. The discount rate of 7.65% used for the June 30, 2015 measurement date is without reduction of pension plan administrative expense.

From fiscal year June 30, 2016 to June 30, 2017:

There were no changes in assumptions.

From fiscal year June 30, 2017 to June 30, 2018:

The discount rate was reduced from 7.65% to 7.15%.

From fiscal year June 30, 2018 to June 30, 2019:

There were no significant changes in assumptions.

From fiscal year June 30, 2019 to June 30, 2020:

There were no changes in assumptions.

From fiscal year June 30, 2020 to June 30, 2021:

There were no changes in assumptions.

From fiscal year June 30, 2021 to June 30, 2022:

There were no changes in assumptions.
* Fiscal year 2015 was the first year of implementation and therefore only eight years are shown.

CITY OF SANTA BARBARA

SCHEDULE OF CONTRIBUTIONS
CALPERS SAFETY FIRE – COST SHARING PENSION PLAN
LAST TEN FISCAL YEARS*
See accompanying Notes to Required Supplementary Information. (135)
Fiscal year ended June 30, 2022 June 30, 2021 June 30, 2020 Actuarially determined contribution 8,084,528 $ 7,467,695 $ 6,804,672 $ Contributions in relation to the
actuarially determined contributions (8,084,528) (7,467,695) (6,804,672) Contribution deficiency (excess) - $ - $ - $
Covered payroll 11,264,741 $ 11,458,176 $ 11,236,079 $
Contributions as a percentage of covered payroll 71.77% 65.17% 60.56% Notes to Schedule:

Valuation Date 6/30/2019 6/30/2018 6/30/2017
Methods and Assumptions Used to Determine Contribution Rates:

Actuarial cost method Entry age Entry age Entry age
Amortization method (1) (1) (1)
Asset valuation method Fair Value Fair Value Fair Value Inflation 2.50% 2.50% 2.63%
Salary increases (2) (2) (2)
Investment rate of return 7.00% (3) 7.00% (3) 7.25% (3) Retirement age (4) (4) (4)
Mortality (5) (5) (5)
(1) Level percentage of payroll, closed.
(2) Depending on age, service and type of employment.
(3) Net of pension plan investment expense, including inflation. (4) The probabilities of retirement are based on the 2010 CalPERS Experience Study report. (5) Mortality assumptions are based on mortality rates resulting from the most recent CalPERS Experience Study adopted by the CalPERS Board.
* Fiscal year 2015 was the first year of implementation and therefore only eight years are shown.

CITY OF SANTA BARBARA

SCHEDULE OF CONTRIBUTIONS
CALPERS SAFETY FIRE – COST SHARING PENSION PLAN (CONTINUED) LAST TEN FISCAL YEARS*
See accompanying Notes to Required Supplementary Information. (136)
Fiscal year ended June 30, 2019 June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015 Actuarially determined contribution 6,089,508 $ 5,446,909 $ 4,917,209 $ 3,672,002 $ 3,535,869 $ Contributions in relation to the
actuarially determined contributions (6,089,508) (5,446,909) (4,917,209) (3,672,002) (3,535,869) Contribution deficiency (excess) - $ - $ - $ - $ - $
Covered payroll 11,685,352 $ 11,156,660 $ 10,848,464 $ 10,699,018 $ 10,382,054 $ Contributions as a percentage of covered payroll 24.16% 48.82% 45.33% 34.32% 34.06% Notes to Schedule:

Valuation Date 6/30/2016 6/30/2015 6/30/2014 6/30/2013 6/30/2012 Methods and Assumptions Used to Determine Contribution Rates:

Actuarial cost method Entry age Entry age Entry age Entry age Entry age Amortization method (1) (1) (1) (1) (1)
Asset valuation method Fair Value Fair Value Fair Value Fair Value 15-Year Smoothed
Market Method
Inflation 2.75% 2.75% 2.75% 2.75% 2.75%
Salary increases (2) (2) (2) (2) (2)
Investment rate of return 7.375% (3) 7.50% (3) 7.50% (3) 7.50% (3) 7.50% (3) Retirement age (4) (4) (4) (4) (4)
Mortality (5) (5) (5) (5) (5)
(1) Level percentage of payroll, closed.
(2) Depending on age, service and type of employment.
(3) Net of pension plan investment expense, including inflation. (4) The probabilities of retirement are based on the 2010 CalPERS Experience Study report. (5) Mortality assumptions are based on mortality rates resulting from the most recent CalPERS Experience Study adopted by the CalPERS Board.
* Fiscal year 2015 was the first year of implementation and therefore only eight years are shown.

CITY OF SANTA BARBARA

SCHEDULE OF CHANGES IN TOTAL OPEB LIABILITY AND RELATED RATIOS LAST TEN FISCAL YEARS*
See accompanying Notes to Required Supplementary Information. (137)
Fiscal Year Ended June 30, 2022 June 30, 2021 June 30, 2020 June 30, 2019 June 30, 2018 Measurement Period Ended June 30, 2021 June 30, 2020 June 30, 2019 June 30, 2018 June 30, 2017 Retiree Medical Benefits and Implied Subsidy
of Retiree Health Insurance Premiums
Total OPEB Liability:

Service cost 2,914,906 $ 1,163,015 $ 1,072,000 $ 1,095,000 $ 1,207,000 $ Interest on total OPEB liability 1,087,405 708,978 769,000 702,000 574,000 Differences between expected and actual experience 2,377,732 - (973,000) - - Changes in assumptions (7,582,037) 8,962,160 486,000 (403,000) (1,015,000) Changes in benefits - 17,472,095 - - - Benefit payments, including refunds of employee contributions (1,144,612) (1,077,000) (1,113,000) (1,094,000) (1,220,000) Net Change in Total OPEB Liability (2,346,606) 27,229,248 241,000 300,000 (454,000) Total OPEB Liability - Beginning of Year 46,861,248 19,632,000 19,391,000 19,091,000 19,545,000 Total OPEB Liability - End of Year (a) 44,514,642 $ 46,861,248 $ 19,632,000 $ 19,391,000 $ 19,091,000 $ Covered employee payroll 106,214,415 $ 106,214,415 $ 104,812,000 $ 104,063,000 $ 99,027,000 $ Total OPEB liability as percentage of
covered employee payroll 41.91% 44.12% 18.73% 18.63% 19.28% Sick Leave Retiree Benefits
Total OPEB Liability:

Service cost 565,386 $ 457,457 $ 435,000 $ 440,000 $ 474,000 $ Interest on total OPEB liability 162,185 244,438 277,000 260,000 212,000 Differences between expected and actual experience 1,099,518 497,075 (165,000) - - Changes in assumptions (122,511) - 132,000 (105,000) (265,000) Changes in benefits 1,474,847 - - - - Benefit payments, including refunds of employee contributions (1,085,312) (819,000) (936,000) (453,000) (628,000) Net Change in Total OPEB Liability 2,094,113 379,970 (257,000) 142,000 (207,000) Total OPEB Liability - Beginning of Year 7,315,970 6,936,000 7,193,000 7,051,000 7,258,000 Total OPEB Liability - End of Year (a) 9,410,083 $ 7,315,970 $ 6,936,000 $ 7,193,000 $ 7,051,000 $ Covered employee payroll 101,076,700 $ 89,727,663 $ 88,659,000 $ 86,545,000 $ 83,539,000 $ Total OPEB liability as percentage of
covered employee payroll 9.31% 8.15% 7.82% 8.31% 8.44%
Notes to Schedule:

There are no assets accumulated in a trust that meets the criteria of GASB codification to pay related benefits for the OPEB plan.

Benefit Changes:

The City changed to CalPERS healthcare plan (PEMHCA) effective January 1, 2020, which resulted in a significant increase to the Total OPEB liability for the year ended June 30, 2021.

Changes in Assumptions:

From fiscal year June 30, 2017 to June 30, 2018:

Discount rate was changed from 2.85% to 3.58%.

From fiscal year June 30, 2018 to June 30, 2019:

Discount rate was changed from 3.58% to 3.87%.

From fiscal year June 30, 2019 to June 30, 2020:

Discount rate was changed from 3.87% to 3.50%.

From fiscal year June 30, 2020 to June 30, 2021:

Discount rate was changed from 3.50% to 2.21%.

From fiscal year June 30, 2021 to June 30, 2022:

Discount rate was changed from 2.21% to 2.16%.
* Fiscal year 2018 was the first year of implementation and therefore only five years are shown.

CITY OF SANTA BARBARA

BUDGETARY COMPARISON SCHEDULE

GENERAL FUND
YEAR ENDED JUNE 30, 2022
See accompanying Notes to Required Supplementary Information. (138)
Variance with
Final Budget
Positive
Original Final Actual (Negative)

REVENUES
Taxes 122,717,745 $ 128,553,757 $ 141,665,066 $ 13,111,309 $ Franchise Fees 3,706,830 3,706,830 4,176,091 469,261
Intergovernmental 1,520,792 13,653,259 8,096,808 (5,556,451) Charges for Services 24,942,013 25,460,227 26,224,289 764,062 Use of Money and Property 897,834 897,834 (2,228,391) (3,126,225) Fines and Forfeitures 2,861,900 2,861,905 2,334,683 (527,222) Other Revenue 10,275,610 10,275,610 11,783,066 1,507,456 Total Revenues 166,922,724 185,409,422 192,051,612 6,642,190

EXPENDITURES
Current:

Mayor and City Council 3,590,732 3,612,671 3,469,045 143,626 City Attorney 4,664,365 4,003,086 5,074,830 (410,465)
City Administration 4,250,866 5,221,572 4,262,574 958,998 Human Resources 1,840,056 3,000,071 1,937,370 1,062,701 Finance 6,333,459 6,688,248 6,153,633 534,615
Public Safety 80,776,935 77,150,443 79,737,205 1,039,730 Public Works 9,767,209 10,599,370 9,038,773 1,560,597
Community Services 24,428,891 25,842,318 23,839,923 2,002,395 Community Development 11,270,416 12,102,054 12,676,048 (573,994) Sustainability and Resilience 156,300 247,535 109,765 137,770 Debt Service:

Principal Retirement - - 333,713 (333,713)
Interest and Fiscal Charges - - 84,186 (84,186)
Total Expenditures 142,791,458 152,755,139 146,717,065 6,038,074

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES 32,654,283 24,131,266 45,334,547 12,680,264

OTHER FINANCING SOURCES (USES)
Lease Obligation - - 1,178,796 1,178,796
Transfers in 1,684,432 1,815,159 1,815,159 -
Transfers out (26,702,153) (40,500,774) 5,006,093 (35,494,681) Total Other Financing
Sources (Uses) (25,017,721) (38,685,615) 6,184,889 (32,500,726) NET CHANGE IN FUND BALANCE (6,031,332 (886,455) 12,833,821 ) 18,865,153 Fund Balance - Beginning of Year 38,734,314 38,734,314 38,734,314 - FUND BALANCE - END OF YEAR $ 32,702,982 37,847,859 $ 51,568,135 $ 18,865,153 $ Budgeted Amounts

CITY OF SANTA BARBARA

BUDGETARY COMPARISON SCHEDULE

AFFORDABLE HOUSING SPECIAL REVENUE FUND
YEAR ENDED JUNE 30, 2022
See accompanying Notes to Required Supplementary Information. (139)
Variance with
Final Budget
Positive
Original Final Actual (Negative)

REVENUES
Use of Money and Property $ 1,517,445 1,517,445 $ 1,402,140 $ $ (115,305)

EXPENDITURES
Current:

Community Development 1,220,272 2,780,993 1,076,882 1,704,111

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES 297,173 325,258 (1,263,548) 1,588,806

OTHER FINANCING SOURCES (USES)
Transfers in - 8,674 8,674 -
Total Other Financing
Sources (Uses) 8,674 - 8,674 -
NET CHANGE IN FUND BALANCE 297,173 333,932 (1,254,874) 1,588,806 Fund Balance - Beginning of Year 67,549,824 67,549,824 67,549,824 - FUND BALANCE - END OF YEAR $ 66,294,950 67,846,997 $ 67,883,756 $ 1,588,806 $ Budgeted Amounts

CITY OF SANTA BARBARA

NOTES TO REQUIRED SUPPLEMENTARY INFORMATION

MODIFIED APPROACH
JUNE 30, 2022
(140)
NOTE 1 BUDGETARY INFORMATION
A two-year financial plan is prepared from which annual budgets are adopted on a basis consistent with generally accepted accounting principles for the general fund and certain special revenue funds. Effective fiscal control for debt service is achieved through bond indenture provisions. While budgets are prepared for the City’s capital projects, capital projects generally span more than one year and are effectively controlled at the project level.

In February of each year, departments submit their proposed budgets to the City Administrator. These proposals are reviewed and considered and adjusted as necessary based on funding limitations and priorities. In mid-April, the City Administrator presents a recommended budget to the City Council. From April through mid-June, public hearings are held, and the recommended budget is reviewed in detail with the Council and Finance Committee. The budget is adopted by June 30.

The appropriated budget is prepared by fund, department, and program. Budgets are monitored at varying levels of classification detail; however, expenditures cannot legally exceed appropriations at the department level for the General Fund and at the fund level for all other legally budgeted funds. Department heads may make transfers of appropriations between line items within a program and across programs if they are within the same major object category (i.e., Salaries and Benefits, Supplies and Services, Capital, etc.). The City Administrator is authorized to transfer amounts within individual departmental budgets, both between programs and between major object categories. All other adjustments to appropriations that change the total of a department (within the General Fund) or fund must be approved by Council. The Permanent Local Housing Allocation Fund, FEMA Reimbursement Fund, Library Gift Fund and Canine Unit Fund did not have legally adopted budgets during the current year.

Budgeted amounts, as shown, reflect the originally adopted budget and the final budget that includes re-appropriated prior year encumbrances as well as any approved revisions as detailed below. The original and amended operating budget for the General Fund is shown in the table below.

Originally Adopted Budget 169,313,610 $
Re-appropriated Prior Year Encumbrances 1,800,731
Amendments 22,141,572
Amended Budget 193,255,913 $
Total
Budgeted amendments in the General Fund totaled $23.9 million. $1.8 million was carried forward from Fiscal Year 2021 as encumbrances made in that year. New FY22 budget amendments totaled $22.1 million. The largest change was $9.87 million associated with the American Rescue Plan Act (ARPA) federal emergency grant to maintain services and address additional costs related to COVID-19. Other significant transfers included were $5.84 million to the Measure C Capital Fund for additional sales tax revenue received, and $1.55 million to advance to the Clean Energy Enterprise Fund for startup costs related to the Community Choice Energy program.

CITY OF SANTA BARBARA

NOTES TO REQUIRED SUPPLEMENTARY INFORMATION

MODIFIED APPROACH
JUNE 30, 2022
(141)
NOTE 1 BUDGETARY INFORMATION (CONTINUED)
Additional notable budget amendments included $0.93 million for Fire department overtime costs due to Mutual Aid fire response and minimum staffing requirements, $0.87 million for Police and Library Equipment/Materials, $0.75 million for litigation costs related to three separate settlements, $0.44 million for on-going city employee COVID-19 testing, $0.78 million in contracted services to support increased demand, staffing shortages, and critical analysis, and $0.48 million for Public Works Underground Storage Tank (UST) Abatement costs. The remaining $0.64 million increased appropriations are across many programs in the City as approved by Council.

The City’s Affordable Housing Fund had an originally Adopted Fiscal Year 2022 Budget of $1.22 million that was amended by $1.56 million to an Amended Budget of $2.78 million. $1.55 million of this increase was to fund a property development loan secured by a Deed of Trust with 116 East Cota Street Associates, LP for an Affordable Housing Project located at 100-116 East Cota St., to ensure completion of the new housing units for Low-, Very-Low-, and Extremely-Low-Income individuals. The remaining immaterial increase was related to a one-time special ARPA pay-out to employees who worked through the COVID-19 pandemic.

CITY OF SANTA BARBARA

NOTES TO REQUIRED SUPPLEMENTARY INFORMATION

MODIFIED APPROACH
JUNE 30, 2022
(142)
NOTE 2 MODIFIED APPROACH FOR CITY STREETS INFRASTRUCTURE CAPITAL ASSETS In accordance with GASB Statement No. 34, the City is required to account for and report infrastructure capital assets. The City defines infrastructure as the basic physical assets including the streets system, water and wastewater treatment plants, drainage systems, bridges, and sidewalks. Each major infrastructure network can be divided into subsystems.

For example, the street network can be divided into concrete and asphalt pavements, curbs and gutters, sidewalks, streetlights, traffic control devices, landscaping and land. Subsystem detail is not presented in these basic financial statements; however, the City maintains detailed information on these subsystems.

The City has elected to use the “Modified Approach” as defined by GASB Statement No. 34 for infrastructure reporting for its Streets Pavement System. Under GASB Statement No. 34, eligible infrastructure capital assets are not required to be depreciated under the following requirements:

The City manages the eligible infrastructure capital assets using an asset management system with the characteristics of (1) an up-to-date periodic inventory is performed; (2) condition assessments and summary of results using a measurement scale is completed, and (3) annual amounts to maintain and preserve the eligible infrastructure capital assets at the established condition assessment level are estimated.

The City documents that the eligible infrastructure capital assets are being preserved at the established and disclosed condition assessment level.

The pavement network within the City has approximately 245 miles of paved surfaces, comprised of 126 miles of residential streets, 47 miles of principal arterial and minor arterial streets, 69 miles of collector streets and three miles of alleys. This equates to almost 41 million square feet of pavement.

The City has developed a Pavement Management System (PMS) to inventory and document the physical condition of the City’s street network, including a pavement preservation program. Every two years the City updates a Pavement Management System Report, which identifies and documents the updated condition of the City’s street network.

City-owned streets are classified based on land use, access, and traffic utilization into the following five classifications: principal arterial, minor arterial, collector, residential, and alley.

A condition assessment is performed, through physical street inspections, as part of each biennial report update covering at least one-third of the City’s streets on a rotating basis. As part of the report, each street segment is assigned a condition rating based on a variety of potential defects.

CITY OF SANTA BARBARA

NOTES TO REQUIRED SUPPLEMENTARY INFORMATION

MODIFIED APPROACH
JUNE 30, 2022
(143)
NOTE 2 MODIFIED APPROACH FOR CITY STREETS INFRASTRUCTURE CAPITAL ASSETS (CONTINUED)
A Pavements Condition Index (PCI) rating, a nationally recognized index, is calculated for each street segment and is expressed in a continuous scale from 0 to 100, with 100 being a brand new street and 0 being a badly deteriorated street with virtually no remaining life. The following PCI thresholds, which are generally accepted industry standards, were assigned to each street segment:

Condition Rating
Excellent/Good 71 to 100
At Risk 51 to 70
Poor 25 to 50
Very Poor/Failed 0 to 24
The City’s Pavement Management System provides staff with current technical data to target a desirable level of pavement performance, while optimizing the expenditure of limited fiscal resources. The following table summarizes the average citywide PCI biennially reported since 2004.

Condition Rating
2004 72
2006 71
2008 71
2010 69
2012 63
2014 64
2016 61
2018 61
2020 62
2022 63
Prior to 2012, the City previously used the then industry standard MicroPAVER pavement management software, but in 2012 transitioned to the StreetSaver pavement management software, which is widely used throughout California. The StreetSaver program has several advantages over MicroPAVER, one being the fact that StreetSaver provides PCI information in real-time. StreetSaver utilizes a street segment’s actual inspection and maintenance history, in conjunction with standard pavement deterioration curves, to provide a real-time PCI. Real-time PCI information, as reported by StreetSaver, is more accurate than PCI information based on a past inspection or maintenance and repair treatment, as reported by MicroPAVER. This real-time PCI information provides the City with the greatest opportunity to effectively manage the PMS and accurately report the current condition of the street network.

CITY OF SANTA BARBARA

NOTES TO REQUIRED SUPPLEMENTARY INFORMATION

MODIFIED APPROACH
JUNE 30, 2022
(144)
NOTE 2 MODIFIED APPROACH FOR CITY STREETS INFRASTRUCTURE CAPITAL ASSETS (CONTINUED)
As a result of this software change coupled with ongoing budgetary constraints, the average citywide PCI dropped significantly between 2010 (PCI 69) and 2012 (PCI 63). The PCI had generally been declining since 2002 due to budgetary constraints.

PCI rating levels in the mid-60s to low-70s range allows minor cracking and raveling of the pavement along with minor roughness that could be noticeable to drivers traveling at posted speeds. The City’s formal policy with regard to pavement condition levels is to maintain a minimum average rating of no less than 60 (At Risk) for all streets. This PCI was selected because there is a significant cost increase to maintain streets averaging below a PCI of 60.

In the most recent Pavement Management System report that was run for fiscal year 2022, the City’s street network was rated an average PCI index value of 63 (“At Risk”) with the detail condition as follows:

Approximate
Condition PCI Rating Percent of Streets
Excellent/Good 71-100 32
At Risk 51-70 40
Poor 25-50 20
Very Poor/Failed 0-24 8
In general, streets are constantly deteriorating resulting from the following four factors:
(1) traffic using the streets; (2) the sun’s ultra-violet rays drying out and breaking down the top layer of pavement; (3) utility company/private development interests trenching operations; and (4) water damage from natural precipitation and other urban runoff. The City is continuously taking actions to minimize the deterioration through short-term maintenance activities such as pothole patching.

In January 2014, the former State Route 225 was relinquished to the City from the State, adding over 4.5 centerline miles of primary arterial roadway to the City’s network. This equates to nearly 1.4 million additional square feet of asphalt pavement. The additional roadway segments were inspected in summer 2014 and were included in the analyses used for the 2014 report. Caltrans micro-surfaced the entire route in summer 2011 and as a result, the roadway segments were in “good/excellent” condition, with PCIs generally in the 80s. As a result of adding a large amount of square footage with relatively high PCIs, the citywide PCI increased slightly from a PCI of 63 in 2012 to a PCI of 64 in 2014. While this addition had a short-term positive effect on the citywide PCI, over the long-term, the unfunded backlog of roadwork will be increased due to the increase in pavement square footage requiring maintenance.

CITY OF SANTA BARBARA

NOTES TO REQUIRED SUPPLEMENTARY INFORMATION

MODIFIED APPROACH
JUNE 30, 2022
(145)
NOTE 2 MODIFIED APPROACH FOR CITY STREETS INFRASTRUCTURE CAPITAL ASSETS (CONTINUED)
In Fiscal Year 2017, the PCI had fallen below the established condition assessment level with a citywide PCI of 59. The City addressed the issue by committing to increase annual expenditures on street maintenance projects. On November 7, 2017, a 1% general sales tax measure (Measure C) was approved, with significant community support for infrastructure needs, which will generate the necessary funds required to improve the citywide PCI rating.

In Fiscal Year 2018, expenditures on street maintenance increased by more than $1.0 million, in part due to Measure C. In Fiscal Year 2019, expenditures increased significantly by nearly three times Fiscal Year 2018 expenditures due to Measure C revenues.

During Fiscal Year 2020, the world faced an unprecedented global event, as the impacts of COVID-19 unfolded. The impacts of the pandemic were substantial to revenues across the City. Thanks to delinquent collections, Measure C revenues were not impacted to the degree that other revenues such as Transient Occupancy Taxes. However, in response to cash flow concerns citywide and the uncertainty of how revenues would be impacted, almost $6 million in various Measure C project budgets were reduced from the Fiscal Year 2020 budget. Budget reductions were also taken into account for Fiscal Year 2021 and Fiscal Year 2022 although Measure C revenues came in $2.0 million higher than expected; the funds were committed to competing City priorities.

Two major streets capital resurfacing projects were awarded and substantially completed in Fiscal Year 2022. In addition, a significant amount of paving work was done by the City’s Streets Operations Team. Despite the reduction in expenditures in the last two fiscal years due to the pandemic, expenditures on street maintenance were still higher than preMeasure C expenditures. These increased funding levels starting in Fiscal Year 2018 contributed to an increase in the average Pavement Condition Index (PCI) from 59 to 63, which is above the City’s established policy’s minimum PCI rating of 60.

In Fiscal Year 2022, the City expended $10.2 million on street maintenance including both construction and soft costs (design, construction management, inspection, etc.). Per the 2022 Pavement Management System Report, the City estimated that in order to reach and maintain a PCI rating of 70, approximately $26.9 million would have needed to be spent in fiscal year 2022, and an average of $13 million would need to be budgeted for construction for the next four years (2023 – 2026). The amount of deferred maintenance would have been reduced to $62.2 million in 2023 and increase to $70.1 million by 2026. Even with the significant increase in pavement maintenance funding made possible through Measure C, deferred maintenance costs will continue to increase for the next several years while the City improves its PCI toward 70.

CITY OF SANTA BARBARA

NOTES TO REQUIRED SUPPLEMENTARY INFORMATION

MODIFIED APPROACH
JUNE 30, 2022
(146)
NOTE 2 MODIFIED APPROACH FOR CITY STREETS INFRASTRUCTURE CAPITAL ASSETS (CONTINUED)
A schedule of estimated annual amount calculated to maintain and preserve its streets at the current PCI rating compared to actual expenditures for street maintenance for the last five years is presented below:

Estimate
(to maintain
Fiscal Year current PCI) Expenditures PCI Rating
2017-2018 8,400,000 $ 4,086,518 $ 61
2018-2019 8,400,000 11,530,346 61
2019-2020 7,300,000 15,033,630 62
2020-2021 7,300,000 13,867,744 62
2021-2022 8,200,000 10,167,491 63
The City’s ongoing street preservation program was developed with the goal of improving the condition rating of City streets to a score of 70. The City considers a score of 70 to be an industry standard maintenance level that is the most cost-effective condition to maintain.

Due to a lack of available funds for many years, the overall condition of the road network has dropped as evidenced by the declining PCI rating to a point where less expensive preventative maintenance treatments, such as slurry seal, are no longer effective for many streets.

As a result, more expensive pavement rehabilitation treatments are required, such as grind and overlay, thus significantly increasing the cost to maintain the road network. Although the PCI has increased by a few points over the past several years, more expensive pavement rehabilitation treatments will continue to be required until the PCI reaches 70, when less expensive preventative maintenance treatments will be effective for the majority of the City’s street network.

Funding for street pavement maintenance projects continue to increase as the City is committed to improving this critical infrastructure. The Fiscal Year 2023 budget includes $15.7 million in appropriations for street paving projects, which is designed to ensure a continued improvement in the PCI rating.
(147)

NONMAJOR GOVERNMENTAL FUNDS
(148)

CITY OF SANTA BARBARA, CALIFORNIA

NONMAJOR GOVERNMENTAL FUNDS
JUNE 30, 2022
(149)
Traffic Safety Fund – To account for the receipt of fines collected pursuant to the California Vehicle Code. The State of California Government Code restricts use of these funds to traffic control devices, equipment and supplies related to traffic control or traffic safety and maintenance of public streets. The funds may not be used to pay compensation of traffic or police officers.

Creek Restoration/Water Quality Fund – To account for funds received from a 2% tax increase in the City’s transient occupancy tax. The proceeds are restricted for use in the City’s Creeks Restoration and Water Quality Improvement Program. Measure B was approved by the voters of Santa Barbara County in an election held on November 7, 2000. The tax became effective on January 1, 2001.

Wildland Fire Suppression Fund – To account for funds received and expended for wildland fire suppression.

Permanent Local Housing Allocation Fund – To account for receipt and disbursement of funds received through the Permanent Local Housing Allocation (PLHA) program. The PLHA program was enacted as part of the Building Homes and Jobs Act (California Senate Bill No. 2) in 2018. Its purpose is to provide ongoing funding to local governments for housing-related projects and programs that help address their unmet housing needs.

Transportation Development Fund – To account for the receipt and disbursement of the City’s share of gasoline sales tax pursuant to the Transportation Development Act of 1971. These funds are restricted for use in support of alternative transportation, including sidewalks and bikeways.

Community Development Block Grant Fund – To account for the receipt and disbursement of the City’s Community Development Block Grant funds.

Police – Asset Forfeiture Fund – To account for assets confiscated by police special operations. These funds are restricted to use in support of police operations.

County Library Fund – To account for funds received and expended for library services on behalf of the County (non-City) residents.

Measure A Fund – To account for funds received from a one-half cent sales tax levied Countywide pursuant to Measure A. This measure was approved by the voters of Santa Barbara County in an election held on November 4, 2008, and became effective on April 1, 2010. The proceeds are restricted to transportation uses.

Miscellaneous Grants Fund – To account for resources received from various granting agencies.

Street Sweeping Fund – To account for funds received and expended for street sweeping services.

HOME Program Fund – To account for the receipt and disbursement of the City’s Federal HOME grant funds.

FEMA Reimbursement Fund – To account for costs incurred as a result of the three federally declared disasters from January and February 2017 winter storms, and the Thomas Fire and debris flow in December 2017 and January 2018.
(150)

CITY OF SANTA BARBARA, CALIFORNIA

NONMAJOR GOVERNMENTAL FUNDS (CONTINUED)
JUNE 30, 2022
(151)
Police – Supplemental Law Enforcement Fund – To account for State voter-approved grant funds (AB 3229) restricted to public safety and law enforcement.

Streets Fund – To account for street maintenance and operating costs.

Police CAD-RMS Support Fund – To account for the Police CAD-RMS.

Library Gifts Fund – To account for gifts and bequests made to the City library. Funds are used for library functions.

Canine Unit Fund – To account for contributions made for the Police’s Canine Unit program.

General Capital Improvements Fund – To account for all capital projects financed by the General Fund.

Measure C Capital Fund – To account for capital projects financed by Measure C sales tax revenue.

Street Grant Capital Fund – To account for street-related capital projects financed by various grants.

Measure A Capital Fund – To account for capital projects financed by Measure A.

Street Capital Improvements Fund – To account for street-related capital projects not financed by Grants.

Creeks Restoration Capital Improvement Fund – To account for creeks restoration capital improvements funded by Measure B.

CITY OF SANTA BARBARA

COMBINING BALANCE SHEET

OTHER SPECIAL REVENUE FUNDS
JUNE 30, 2022
(152)
Creek Wildland Permanent
Traffic Restoration/Water Fire Local Housing Transportation Safety Quality Suppression Allocation Development
ASSETS
Pooled Cash and Investments - $ 2,222,415 $ 99,458 $ 29,631 $ 189,669 $ Accounts Receivable, Net 14,791 535,030 - 90,825 -
Loans Receivable - - - - -
Lease Receivable - - - - -
Total Assets 14,791 $ 2,757,445 $ 99,458 $ 120,456 $ 189,669 $

LIABILITIES, DEFERRED

INFLOWS OF RESOURCES

AND FUND BALANCES

LIABILITIES
Accounts Payable 3,010 $ 67,867 $ 4,315 $ 116,480 $ - $ Salaries and Benefits Payable - 33,669 3,284 3,976 -
Unearned Revenue - - - - -
Deposits - - - - -
Due to Other Governments - - - - -
Interfund Payables 11,781 - - - -
Advances from Other Funds - - - - -
Total Liabilities 14,791 101,536 7,599 120,456 -

DEFERRED INFLOWS OF

RESOURCES
Leases - - - - -
Unavailable Revenue - - - 90,825 -
Total Deferred Inflows
of Resources - - - 90,825 -

FUND BALANCES (DEFICITS)
Restricted for:

Public Safety - $ - $ 91,859 $ - $ - $
Public Works - 2,655,909 - - 189,669
Community Services - - - - -
Community Development - - - - -
Capital Improvements - - - - -
Committed to:

Capital Improvements - - - - -
Unassigned - - - (90,825) -
Total Fund Balances (Deficits) - 2,655,909 91,859 (90,825) 189,669 Total Liabilities, Deferred
Inflows of Resources and
Fund Balances (Deficits) 14,791 $ 2,757,445 $ 99,458 $ 120,456 $ 189,669 $ Special Revenue Funds

CITY OF SANTA BARBARA

COMBINING BALANCE SHEET

OTHER SPECIAL REVENUE FUNDS (CONTINUED)
JUNE 30, 2022
(153)
Community
Development Police - Asset Miscellaneous Street HOME
Block Grant Forfeiture County Library Measure A Grants Sweeping Program ASSETS
Pooled Cash and Investments 742,120 $ 673,913 $ 99,563 $ 2,275,618 $ 1,530,986 $ 33,271 $ - $ Accounts Receivable, Net 466,775 198 62,506 475,224 457,756 - 163,777 Loans Receivable 3,338,401 - - - - - 9,819,976
Lease Receivable - - - - - - -
Total Assets 4,547,296 $ 674,111 $ 162,069 $ 2,750,842 $ 1,988,742 $ 33,271 $ 9,983,753 $

LIABILITIES, DEFERRED

INFLOWS OF RESOURCES

AND FUND BALANCES

LIABILITIES
Accounts Payable 95,133 $ - $ 60,518 $ 14,524 $ 48,442 $ 42,681 $ 21,620 $ Salaries and Benefits Payable 6,257 87,458 12,003 26,288 4,276 2,935 717 Unearned Revenue - - - - 128,470 - -
Deposits - 212,896 - - - - -
Due to Other Governments 3,338,401 - - - - - 9,819,976
Interfund Payables - - - - - - 67,674
Advances from Other Funds - - - - - - -
Total Liabilities 3,439,791 300,354 72,521 40,812 181,188 45,616 9,909,987

DEFERRED INFLOWS OF

RESOURCES
Leases - - - - - - -
Unavailable Revenue 4,939 - - - 286,709 - -
Total Deferred Inflows
of Resources 4,939 - - - 286,709 - -

FUND BALANCES (DEFICITS)
Restricted for:

Public Safety - $ 373,757 $ - $ - $ 202,575 $ - $ - $
Public Works - - - 2,710,030 - - -
Community Services - - 89,548 - 1,453,653 - -
Community Development 1,102,566 - - - - - 73,766
Capital Improvements - - - - - - -
Committed to:

Capital Improvements - - - - - - -
Unassigned - - - - (135,383) (12,345) -
Total Fund Balances (Deficits) 1,102,566 373,757 89,548 2,710,030 1,520,845 (12,345) 73,766 Total Liabilities, Deferred
Inflows of Resources and
Fund Balances (Deficits) 4,547,296 $ 674,111 $ 162,069 $ 2,750,842 $ 1,988,742 $ 33,271 $ 9,983,753 $ Special Revenue Funds (Continued)

CITY OF SANTA BARBARA

COMBINING BALANCE SHEET

OTHER SPECIAL REVENUE FUNDS (CONTINUED)
JUNE 30, 2022
(154)
Police Police
FEMA Supplemental Law CAD-RMS Library Canine
Reimbursement Enforcement Streets Support Gift Unit
ASSETS
Pooled Cash and Investments - $ 6,038 $ 391,130 $ 373,662 $ 4,404,029 $ 17,341 $ Accounts Receivable, Net 2,647,533 - 1,043,251 - - -
Loans Receivable - - - - - -
Lease Receivable - - 376,865 - - -
Total Assets 2,647,533 $ 6,038 $ 1,811,246 $ 373,662 $ 4,404,029 $ 17,341 $

LIABILITIES, DEFERRED

INFLOWS OF RESOURCES

AND FUND BALANCES

LIABILITIES
Accounts Payable 13,400 $ 6,038 $ 124,449 $ 4,438 $ - $ - $ Salaries and Benefits Payable - - 120,302 - - -
Unearned Revenue 21,584 - - - - -
Deposits - - - - - -
Due to Other Governments - - - - - -
Interfund Payables 3,216,069 - - - - -
Advances from Other Funds - - - - - -
Total Liabilities 3,251,053 6,038 244,751 4,438 - -

DEFERRED INFLOWS OF

RESOURCES
Leases - - 369,343 - - -
Unavailable Revenue 2,211,566 - - - - -
Total Deferred Inflows
of Resources 2,211,566 - 369,343 - - -

FUND BALANCES (DEFICITS)
Restricted for:

Public Safety - $ - $ - $ 369,224 $ - $ - $
Public Works - - 1,197,152 - - -
Community Services - - - - 4,404,029 17,341
Community Development - - - - - -
Capital Improvements - - - - - -
Committed to:

Capital Improvements - - - - - -
Unassigned (2,815,086) - - - - -
Total Fund Balances (Deficits) (2,815,086) - 1,197,152 369,224 4,404,029 17,341 Total Liabilities, Deferred
Inflows of Resources and
Fund Balances (Deficits) 2,647,533 $ 6,038 $ 1,811,246 $ 373,662 $ 4,404,029 $ 17,341 $ Special Revenue Funds

CITY OF SANTA BARBARA

COMBINING BALANCE SHEET

OTHER SPECIAL REVENUE FUNDS (CONTINUED)
JUNE 30, 2022
(155)
Total
General Streets Creek Other
Capital Measure C Street Grant Measure A Capital Restoration Governmental Improvements Capital Capital Capital Improvements Capital Funds ASSETS
Pooled Cash and Investments 4,412,689 $ 35,371,250 $ - $ 2,064,230 $ 5,528,100 $ 10,441,741 $ 70,906,854 $ Accounts Receivable, Net 23,425 - 8,759,061 - 12,667 - 14,752,819 Loans Receivable - - - - - - 13,158,377
Lease Receivable - - - - - - 376,865
Total Assets 4,436,114 $ 35,371,250 $ 8,759,061 $ 2,064,230 $ 5,540,767 $ 10,441,741 $ 99,194,915 $

LIABILITIES, DEFERRED

INFLOWS OF RESOURCES

AND FUND BALANCES

LIABILITIES
Accounts Payable 179,062 $ 1,767,836 $ 2,686,104 $ 83,216 $ 20,216 $ 78,204 $ 5,437,553 $ Salaries and Benefits Payable - - - - - - 301,165
Unearned Revenue - - 805,853 - - - 955,907
Deposits - - - - - - 212,896
Due to Other Governments - - - - - - 13,158,377
Interfund Payables - - 4,555,804 - - - 7,851,328
Advances from Other Funds - 2,122,416 - - - - 2,122,416 Total Liabilities 179,062 3,890,252 8,047,761 83,216 20,216 78,204 30,039,642

DEFERRED INFLOWS OF

RESOURCES
Leases - - - - - - 369,343
Unavailable Revenue 3,627 - 6,685,880 - - - 9,283,546
Total Deferred Inflows
of Resources 3,627 - 6,685,880 - - - 9,652,889

FUND BALANCES (DEFICITS)
Restricted for:

Public Safety - $ - $ - $ - $ - $ - $ 1,037,415 $
Public Works - - - - - 10,363,537 17,116,297
Community Services - - - - - - 5,964,571
Community Development - - - - - - 1,176,332
Capital Improvements 702,521 - - 1,981,014 - - 2,683,535 Committed to:

Capital Improvements 3,550,904 31,480,998 - - 5,520,551 - 40,552,453 Unassigned - - (5,974,580) - - - (9,028,219)
Total Fund Balances (Deficits) 4,253,425 31,480,998 (5,974,580) 1,981,014 5,520,551 10,363,537 59,502,384 Total Liabilities, Deferred
Inflows of Resources and
Fund Balances (Deficits) 4,436,114 $ 35,371,250 $ 8,759,061 $ 2,064,230 $ 5,540,767 $ 10,441,741 $ 99,194,915 $ Capital Projects Funds

CITY OF SANTA BARBARA

COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES – OTHER SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30, 2022
(156)
Creek Wildland Permanent
Traffic Restoration/Water Fire Local Housing Transportation Safety Quality Suppression Allocation Development

REVENUES
Taxes - $ 5,327,684 $ - $ - $ 98,771 $
Intergovernmental - - - 453,109 -
Fines and Forfeitures 236,596 13,613 - - -
Charges for Services - - - - -
Use of Money and Property - (355,802) - - (5,795)
Program Income - - - - -
Other - 20,992 292,227 - -
Total Revenues 236,596 5,006,487 292,227 453,109 92,976

EXPENDITURES
Current:

Finance - - - - -
Public Safety 14,280 - 261,347 - -
Public Works - 2,333,516 - - 157
Community Services - - - - -
Community Development - - - 416,930 -
Capital Outlay - - - - -
Total Expenditures 14,280 2,333,516 261,347 416,930 157

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES 2,672,971 222,316 30,880 36,179 92,819

OTHER FINANCING USES
Transfers in - 22,446 2,891 - -
Transfers out (222,316) (1,224,431) - - -
Total Other Financing Uses (222,316) (1,201,985) 2,891 - - NET CHANGE IN FUND BALANCES 1,470,986 - 33,771 36,179 92,819 Fund Balances (Deficits) -
Beginning of Year - 1,184,923 58,088 (127,004) 96,850

FUND BALANCES (DEFICITS) -
END OF YEAR $ 2,655,909 - $ 91,859 $ (90,825) $ 189,669 $ Special Revenue Funds

CITY OF SANTA BARBARA

COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES – OTHER SPECIAL REVENUE FUNDS (CONTINUED) YEAR ENDED JUNE 30, 2022
(157)
Community
Development Police - Asset Miscellaneous Street HOME
Block Grant Forfeiture County Library Measure A Grants Sweeping Program

REVENUES
Taxes - $ - $ - $ 5,205,504 $ - $ - $ - $
Intergovernmental 1,034,405 51,083 780,810 - 1,705,613 - 163,777 Fines and Forfeitures - - 2,831 - - 661,489 -
Charges for Services - 67,560 - - 7,260 - -
Use of Money and Property - 1,163 (3,324) (129,161) - - - Program Income 335,720 - - - - - 73,766
Other - 6,998 163,348 - 363,841 - -
Total Revenues 1,370,125 126,804 943,665 5,076,343 2,076,714 661,489 237,543

EXPENDITURES
Current:

Finance - - - - - - -
Public Safety - 151,753 - - 159,229 - -
Public Works - - - 2,040,048 - 703,686 -
Community Services - - 911,241 - 609,362 - -
Community Development 1,391,739 - - - 909,843 - 246,350 Capital Outlay - - 77,020 - 604 - -
Total Expenditures 1,391,739 151,753 988,261 2,040,048 1,679,038 703,686 246,350

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES (24,949) (21,614) (44,596) 3,036,295 397,676 (42,197) (8,807)

OTHER FINANCING USES
Transfers in - - 4,342 6,290 15,000 392,676 -
Transfers out - (100,000) - (2,379,876) - (372,420) -
Total Other Financing Uses - (100,000) 4,342 (2,373,586) 15,000 20,256 - NET CHANGE IN FUND BALANCES (124,949) (21,614) (40,254) 662,709 412,676 (21,941) (8,807) Fund Balances (Deficits) -
Beginning of Year 1,124,180 498,706 129,802 2,047,321 1,108,169 9,596 82,573

FUND BALANCES (DEFICITS) -
END OF YEAR $ 373,757 1,102,566 $ 89,548 $ 2,710,030 $ 1,520,845 $ (12,345) $ 73,766 $ Special Revenue Funds (Continued)

CITY OF SANTA BARBARA

COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES – OTHER SPECIAL REVENUE FUNDS (CONTINUED) YEAR ENDED JUNE 30, 2022
(158)
Police Police
FEMA Supplemental Law CAD-RMS Library Canine
Reimbursement Enforcement Streets Support Gift Unit

REVENUES
Taxes - $ - $ 7,804,879 $ - $ - $ - $
Intergovernmental 508,702 229,612 3,987,367 86,523 15,043 104 Fines and Forfeitures - - - - - -
Charges for Services - - 317,871 - - -
Use of Money and Property - 13 45,192 - - -
Program Income - - - - - -
Other - - 347,382 - 242,144 -
Total Revenues 508,702 229,625 12,502,691 86,523 257,187 104

EXPENDITURES
Current:

Finance 8,154 - - - - 12,494
Public Safety - 232,516 - 44,730 - -
Public Works 223,819 - 9,599,656 - - -
Community Services - - - - - -
Community Development - - - - - -
Capital Outlay - - - - - -
Total Expenditures 231,973 232,516 9,599,656 44,730 - 12,494

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES (2,891) 276,729 2,903,035 41,793 257,187 (12,390)

OTHER FINANCING USES
Transfers in 69,800 2,891 251,205 - - -
Transfers out - - (4,034,809) - - -
Total Other Financing Uses 69,800 2,891 (3,783,604) - - - NET CHANGE IN FUND BALANCES - 346,529 (880,569) 41,793 257,187 (12,390) Fund Balances (Deficits) -
Beginning of Year (3,161,615) - 2,077,721 327,431 4,146,842 29,731

FUND BALANCES (DEFICITS) -
END OF YEAR $ - (2,815,086) $ 1,197,152 $ 369,224 $ 4,404,029 $ 17,341 $ Special Revenue Funds

CITY OF SANTA BARBARA

COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES – OTHER SPECIAL REVENUE FUNDS (CONTINUED) YEAR ENDED JUNE 30, 2022
(159)
Total
General Streets Creek Other
Capital Measure C Street Grant Measure A Capital Restoration Governmental Improvements Capital Capital Capital Improvements Capital Funds

REVENUES
Taxes - $ - $ - $ - $ - $ - $ 18,436,838 $
Intergovernmental 19,798 - 9,530,134 - - 50,000 18,616,080 Fines and Forfeitures - - - - - - 914,529
Charges for Services - - - - - - 392,691
Use of Money and Property - - - - - - (447,714)
Program Income - - - - - - 409,486
Other 10,000 - - - - - 1,446,932
Total Revenues 29,798 - 9,530,134 - - 50,000 39,768,842

EXPENDITURES
Current:

Finance - - - - - - 20,648
Public Safety - - - - - - 863,855
Public Works 27,512 - - - - - 14,928,394
Community Services - - - - - - 1,520,603
Community Development - - - - - - 2,964,862
Capital Outlay 556,891 17,595,716 14,214,613 702,743 22,155 1,482,047 34,651,789 Total Expenditures 584,403 17,595,716 14,214,613 702,743 22,155 1,482,047 54,950,151

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES (17,595,716) (554,605) (4,684,479) (702,743) (22,155) (1,432,047) (15,181,309)

OTHER FINANCING USES
Transfers in 900,151 30,824,430 645,246 2,232,712 3,751,027 1,025,000 40,146,107 Transfers out (15,585) - - (445,666) (99,460) (102,230) (8,996,793) Total Other Financing Uses 884,566 30,824,430 645,246 1,787,046 3,651,567 922,770 31,149,314 NET CHANGE IN FUND BALANCES 13,228,714 329,961 (4,039,233) 1,084,303 3,629,412 (509,277) 15,968,005 Fund Balances (Deficits) -
Beginning of Year 3,923,464 18,252,284 (1,935,347) 896,711 1,891,139 10,872,814 43,534,379

FUND BALANCES (DEFICITS) -
END OF YEAR $ 31,480,998 4,253,425 $ (5,974,580) $ 1,981,014 $ 5,520,551 $ 10,363,537 $ 59,502,384 $ Capital Projects Fund

CITY OF SANTA BARBARA

SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES – BUDGET AND ACTUAL

TRAFFIC SAFETY
YEAR ENDED JUNE 30, 2022
(160)
Variance with
Final Budget
Positive
Original Final Actual (Negative)

REVENUES
Fines and Forfeitures 233,000 $ 236,596 $ 236,596 $ - $

EXPENDITURES
Current:

Public Safety 14,280 15,000 14,280 -

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES 222,316 218,000 222,316 -

OTHER FINANCING USES
Transfers out (218,000) (222,316) - (222,316)

NET CHANGE IN FUND BALANCE - - - -
Fund Balance - Beginning of Year - - - -
FUND BALANCE - END OF YEAR $ - - $ - $ - $
Budgeted Amounts

CITY OF SANTA BARBARA

SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES – BUDGET AND ACTUAL

CREEK RESTORATION/WATER QUALITY
YEAR ENDED JUNE 30, 2022
(161)
Variance with
Final Budget
Positive
Original Final Actual (Negative)

REVENUES
Taxes 3,900,000 $ 3,900,000 $ 5,327,684 $ 1,427,684 $
Fines and Forfeitures - - 13,613 13,613
Use of Money and Property 97,945 97,945 (355,802) (453,747) Other 12,402 12,402 20,992 8,590
Total Revenues 4,010,347 4,010,347 5,006,487 996,140

EXPENDITURES
Current:

Public Works 2,930,357 3,046,294 2,333,516 712,778
Total Expenditures 2,930,357 3,046,294 2,333,516 712,778

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES 964,053 1,079,990 2,672,971 1,708,918

OTHER FINANCING USES
Transfers in - 22,446 (22,446) 44,892
Transfers out (1,224,431) (1,224,431) - (1,224,431)
Total Other Financing Uses (1,224,431) (1,246,877) 44,892 (1,201,985) NET CHANGE IN FUND BALANCE (282,824 (144,441) 1,470,986 ) 1,753,810 Fund Balance - Beginning of Year 1,184,923 1,184,923 1,184,923 - FUND BALANCE - END OF YEAR $ 902,099 1,040,482 $ 2,655,909 $ 1,753,810 $ Budgeted Amounts

CITY OF SANTA BARBARA

SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES – BUDGET AND ACTUAL

WILDLAND FIRE SUPPRESSION
YEAR ENDED JUNE 30, 2022
(162)
Variance with
Final Budget
Positive
Original Final Actual (Negative)

REVENUES
Other 293,570 $ 293,570 $ 292,227 $ $ (1,343)

EXPENDITURES
Current:

Public Safety 297,156 293,596 261,347 35,809

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES (3,586 (26) 30,880 ) 34,466

OTHER FINANCING USES
Transfers in - 2,891 2,891 -
Total Other Financing Uses - 2,891 2,891 -
NET CHANGE IN FUND BALANCE (695 (26) 33,771 ) 34,466
Fund Balance - Beginning of Year 58,088 58,088 58,088 - FUND BALANCE - END OF YEAR $ 57,393 58,062 $ 91,859 $ 34,466 $ Budgeted Amounts

CITY OF SANTA BARBARA

SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES – BUDGET AND ACTUAL

TRANSPORTATION DEVELOPMENT
YEAR ENDED JUNE 30, 2022
(163)
Variance with
Final Budget
Positive
Original Final Actual (Negative)

REVENUES
Taxes 78,745 $ 97,847 $ 98,771 $ 924 $
Use of Money and Property 1,545 1,545 (5,795) (7,340)
Total Revenues 80,290 99,392 92,976 (6,416)

EXPENDITURES
Current:

Public Works 80,395 154,170 157 154,013

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES (54,778) (105) 92,819 147,597
NET CHANGE IN FUND BALANCE (54,778) (105) 92,819 147,597 Fund Balance - Beginning of Year 96,850 96,850 96,850 - FUND BALANCE - END OF YEAR $ 42,072 96,745 $ 189,669 $ 147,597 $ Budgeted Amounts

CITY OF SANTA BARBARA

SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES – BUDGET AND ACTUAL

COMMUNITY DEVELOPMENT BLOCK GRANT
YEAR ENDED JUNE 30, 2022
(164)
Variance with
Final Budget
Positive
Original Final Actual (Negative)

REVENUES
Intergovernmental 896,247 $ 1,714,181 $ 1,034,405 $ $ (679,776) Program Income 300,000 300,000 335,720 35,720
Total Revenues 1,196,247 2,014,181 1,370,125 (644,056)

EXPENDITURES
Current:

Development Services 1,196,247 2,664,896 1,391,739 1,273,157 NET CHANGE IN FUND BALANCE - (650,715) 629,101 (21,614) Fund Balance - Beginning of Year 1,124,180 1,124,180 1,124,180 - FUND BALANCE - END OF YEAR $ 473,465 1,124,180 $ 1,102,566 $ 629,101 $ Budgeted Amounts

CITY OF SANTA BARBARA

SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES – BUDGET AND ACTUAL
POLICE – ASSET FORFEITURE
YEAR ENDED JUNE 30, 2022
(165)
Variance with
Final Budget
Positive
Original Final Actual (Negative)

REVENUES
Intergovernmental 52,000 $ 62,700 $ 51,083 $ $ (11,617) Charges for Services 95,000 95,000 67,560 (27,440)
Use of Money and Property - - 1,163 1,163
Other - - 6,998 6,998
Total Revenues 147,000 157,700 126,804 (30,896)

EXPENDITURES
Current:

Public Safety 197,173 168,746 151,753 45,420

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES (39,473 (21,746) (24,949 ) 14,524 )

OTHER FINANCING USES
Transfers out - (100,000) - (100,000)
NET CHANGE IN FUND BALANCE (139,473 (21,746) (124,949 ) 14,524 ) Fund Balance - Beginning of Year 498,706 498,706 498,706 - FUND BALANCE - END OF YEAR $ 359,233 476,960 $ 373,757 $ 14,524 $ Budgeted Amounts

CITY OF SANTA BARBARA

SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES – BUDGET AND ACTUAL

COUNTY LIBRARY
YEAR ENDED JUNE 30, 2022
(166)
Variance with
Final Budget
Positive
Original Final Actual (Negative)

REVENUES
Intergovernmental 786,855 $ 864,783 $ 780,810 $ $ (83,973) Fines and Forfeitures 4,425 4,425 2,831 (1,594)
Use of Money and Property 2,500 2,500 (3,324) (5,824)
Other 157,000 202,000 163,348 (38,652)
Total Revenues 950,780 1,073,708 943,665 (130,043)

EXPENDITURES
Current:

Community Services 885,414 1,017,376 911,241 106,135
Capital Outlay 61,739 100,239 77,020 (15,281)
Total Expenditures 985,653 1,079,115 988,261 90,854

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES (5,407 (34,873) (44,596 ) (39,189 ) )

OTHER FINANCING USES
Transfers in - 4,342 4,342 -
NET CHANGE IN FUND BALANCE (1,065 (34,873) (40,254 ) (39,189 ) ) Fund Balance - Beginning of Year 129,802 129,802 129,802 - FUND BALANCE - END OF YEAR $ 128,737 94,929 $ 89,548 $ (39,189) $ Budgeted Amounts

CITY OF SANTA BARBARA

SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES – BUDGET AND ACTUAL

MEASURE A
YEAR ENDED JUNE 30, 2022
(167)
Variance with
Final Budget
Positive
Original Final Actual (Negative)

REVENUES
Taxes 4,044,564 $ 4,044,564 $ 5,205,504 $ 1,160,940 $
Use of Money and Property 11,145 11,145 (129,161) (140,306) Total Revenues 4,055,709 4,055,709 5,076,343 1,020,634

EXPENDITURES
Current:

Public Works 2,433,437 2,475,059 2,040,048 435,011

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES 1,580,650 1,622,272 3,036,295 1,455,645

OTHER FINANCING USES
Transfers in - 6,290 6,290 -
Transfers out (1,627,649) (2,379,876) - (2,379,876)
Total Other Financing Uses (1,627,649) (2,373,586) - (2,373,586) NET CHANGE IN FUND BALANCE (792,936 (5,377) 662,709 ) 1,455,645 Fund Balance - Beginning of Year 2,047,321 2,047,321 2,047,321 - FUND BALANCE - END OF YEAR $ 1,254,385 2,041,944 $ 2,710,030 $ 1,455,645 $ Budgeted Amounts

CITY OF SANTA BARBARA

SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES – BUDGET AND ACTUAL

MISCELLANEOUS GRANTS
YEAR ENDED JUNE 30, 2022
(168)
Variance with
Final Budget
Positive
Original Final Actual (Negative)

REVENUES
Intergovernmental - $ 4,932,570 $ 1,705,613 $ $ (3,226,957) Charges for Services 19,000 19,000 7,260 (11,740)
Other 91,800 3,671,915 363,841 (3,308,074)
Total Revenues 110,800 8,623,485 2,076,714 (6,546,771)

EXPENDITURES
Current:

Public Safety 568,585 10,000 159,229 409,356
Development Services - 1,347,363 - 1,347,363
Community Services 185,168 2,970,705 609,362 2,361,343
Public Works/Utilities - - 909,843 (909,843)
Capital Outlay 3,403,083 - 604 3,402,479
Total Expenditures 195,168 8,289,736 1,679,038 6,610,698

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES 333,749 (84,368) 397,676 63,927

OTHER FINANCING USES
Transfers in - 715,000 15,000 (700,000)
NET CHANGE IN FUND BALANCE 1,048,749 (84,368) 412,676 (636,073 ) Fund Balance - Beginning of Year 1,108,169 1,108,169 1,108,169 - FUND BALANCE - END OF YEAR $ 2,156,918 1,023,801 $ 1,520,845 $ (636,073) $ Budgeted Amounts

CITY OF SANTA BARBARA

SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES – BUDGET AND ACTUAL

STREET SWEEPING
YEAR ENDED JUNE 30, 2022
(169)
Variance with
Final Budget
Positive
Original Final Actual (Negative)

REVENUES
Fines and Forfeitures 697,000 $ 697,000 $ 661,489 $ $ (35,511)

EXPENDITURES
Current:

Public Works 732,482 743,210 703,686 39,524

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES (46,210 (35,482) (42,197 ) 4,013 )

OTHER FINANCING USES
Transfers in 382,676 392,676 392,676 -
Transfers out (372,420) (372,420) - (372,420)
Total Other Financing Uses 10,256 20,256 20,256 -
NET CHANGE IN FUND BALANCE (25,954 (25,226) (21,941 ) 4,013 ) Fund Balance - Beginning of Year 9,596 9,596 9,596 -
FUND BALANCE (DEFICIT) - END OF YEAR $ (16,358) (15,630) $ (12,345) $ 4,013 $ Budgeted Amounts

CITY OF SANTA BARBARA

SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES – BUDGET AND ACTUAL

HOME PROGRAM
YEAR ENDED JUNE 30, 2022
(170)
Variance with
Final Budget
Positive
Original Final Actual (Negative)

REVENUES
Intergovernmental 513,817 $ 1,198,931 $ 163,777 $ $ (1,035,154) Program Income 65,000 82,573 73,766 (8,807)
Total Revenues 578,817 1,281,504 237,543 (1,043,961)

EXPENDITURES
Current:

Development Services 578,817 1,247,827 246,350 1,001,477 NET CHANGE IN FUND BALANCE 33,677 - (8,807) (42,484)
Fund Balance - Beginning of Year 82,573 82,573 82,573 - FUND BALANCE - END OF YEAR $ 116,250 82,573 $ 73,766 $ (42,484) $ Budgeted Amounts

CITY OF SANTA BARBARA

SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES – BUDGET AND ACTUAL
POLICE – SUPPLEMENTAL LAW ENFORCEMENT
YEAR ENDED JUNE 30, 2022
(171)
Variance with
Final Budget
Positive
Original Final Actual (Negative)

REVENUES
Intergovernmental 218,104 $ 229,590 $ 229,612 $ 22 $
Use of Money and Property - - 13 13
Total Revenues 218,104 229,590 229,625 35

EXPENDITURES
Current:

Public Safety 235,179 220,556 232,516 2,663

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES (5,589 (2,452) (2,891 ) 2,698 )

OTHER FINANCING USES
Transfers in - 2,891 2,891 -
NET CHANGE IN FUND BALANCE (2,698 (2,452) - ) 2,698
Fund Balance - Beginning of Year - - - -
FUND BALANCE - END OF YEAR $ (2,698) (2,452) $ - $ 2,698 $ Budgeted Amounts

CITY OF SANTA BARBARA

SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES – BUDGET AND ACTUAL

STREETS
YEAR ENDED JUNE 30, 2022
(172)
Variance with
Final Budget
Positive
Original Final Actual (Negative)

REVENUES
Taxes 7,382,734 $ 7,382,734 $ 7,804,879 $ 422,145 $
Intergovernmental 4,200,954 4,200,954 3,987,367 (213,587) Charges for Services 202,436 202,436 317,871 115,435
Use of Money and Property 36,968 36,968 45,192 8,224
Other 336,822 336,822 347,382 10,560
Total Revenues 12,159,914 12,159,914 12,502,691 342,777

EXPENDITURES
Current:

Public Works 9,799,443 10,410,385 9,599,656 810,729

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES 1,749,529 2,360,471 2,903,035 1,153,506

OTHER FINANCING USES
Transfers in - 251,205 251,205 -
Transfers out (2,149,206) (4,034,809) - (4,034,809)
Total Other Financing Uses (2,149,206) (3,783,604) - (3,783,604) NET CHANGE IN FUND BALANCE (2,034,075 211,265 (880,569 ) 1,153,506 ) Fund Balance - Beginning of Year 2,077,721 2,077,721 2,077,721 - FUND BALANCE - END OF YEAR $ 43,646 2,288,986 $ 1,197,152 $ 1,153,506 $ Budgeted Amounts

CITY OF SANTA BARBARA

SCHEDULE OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES – BUDGET AND ACTUAL

POLICE CAD-RMS SUPPORT
YEAR ENDED JUNE 30, 2022
(173)
Variance with
Final Budget
Positive
Original Final Actual (Negative)

REVENUES
Intergovernmental 86,523 $ 86,523 $ 86,523 $ - $

EXPENDITURES
Current:

Public Safety 107,890 85,000 44,730 63,160
NET CHANGE IN FUND BALANCE (21,367 1,523 41,793 ) 63,160 Fund Balance - Beginning of Year 327,431 327,431 327,431 - FUND BALANCE - END OF YEAR $ 306,064 328,954 $ 369,224 $ 63,160 $ Budgeted Amounts
(174)
(175)

NONMAJOR PROPRIETARY FUNDS
(176)

CITY OF SANTA BARBARA, CALIFORNIA

NONMAJOR PROPRIETARY FUNDS
JUNE 30, 2022
(177)
Downtown Parking Fund – To account for the provision of parking services in the downtown area of the City. All activities necessary to provide such services are accounted for in this fund including, but not limited to, administration, operations, maintenance, capital acquisition and construction, financing and related debt service, and billing and collection of fees.

Golf Course Fund – To account for the operation of municipal golf course. All activities necessary to provide such services are accounted for in this fund including, but not limited to, administration, operations, maintenance, capital acquisition and construction, financing and related debt service, and billing and collection of fees.

Clean Energy – To account for the cost to procure clean and renewable electricity on behalf of the Santa Barbara Community.

CITY OF SANTA BARBARA

COMBINING STATEMENT OF NET POSITION

NONMAJOR ENTERPRISE FUNDS
JUNE 30, 2022
(178)
Downtown Golf Clean
Parking Course Energy Total
ASSETS

CURRENT ASSETS
Pooled Cash and Investments 4,917,173 $ 2,954,180 $ 683,419 $ 8,554,772 $ Receivables:

Accounts 27,132 24,642 5,272,291 5,324,065 Leases 358,090 131,894 - 489,984 Prepaid Assets - - 283,682 283,682 Deposits - 225,000 - 225,000
Inventories - 82,635 - 82,635 Total Current Assets 5,302,395 3,418,351 6,239,392 14,960,138 NONCURRENT ASSETS Leases, Noncurrent 963,198 424,503 - 1,387,701
Capital Assets:

Nondepreciable 10,782,261 342,302 - 11,124,563
Depreciable, Net 24,477,013 2,431,075 - 26,908,088 Total Noncurrent Assets 36,222,472 3,197,880 - 39,420,352 Total Assets 41,524,867 6,616,231 6,239,392 54,380,490

DEFERRED OUTFLOWS OF RESOURCES
Pension Related 617,104 19,483 41,713 678,300 LIABILITIES

CURRENT LIABILITIES
Accounts Payable 210,846 380,946 5,459,557 6,051,349 Salaries and Benefits Payable 115,930 2,116 5,205 123,251 Unearned Revenue - 152,158 - 152,158 Deposits - 29,988 - 29,988 Lease Payable - 69,165 - 69,165 Compensated Absences Payable 28,444 - 523 28,967 Total Current Liabilities 355,220 634,373 5,465,285 6,454,878 NONCURRENT LIABILITIES Advances from Other Funds - 440,610 2,062,957 2,503,567 Lease Payable, Noncurrent - 113,181 - 113,181 Compensated Absences Payable 255,997 - 4,710 260,707 Net Pension Liability 1,755,789 3,469,378 182,583 5,407,750 Total Noncurrent Liabilities 3,725,375 2,309,580 2,250,250 8,285,205 Total Liabilities 4,080,595 2,943,953 7,715,535 14,740,083 DEFERRED INFLOWS OF RESOURCES Pension Related 1,332,766 42,079 90,088 1,464,933 Lease Related 1,278,853 534,655 - 1,813,508 Total Deferred Inflows of Resources 2,611,619 576,734 90,088 3,278,441

NET POSITION
Net Investment in Capital Assets 35,214,180 2,773,377 - 37,987,557 Unrestricted 235,577 341,650 (947,291 (1,524,518) ) Total Net Position 35,449,757 $ 3,115,027 $ (1,524,518) $ 37,040,266 $

CITY OF SANTA BARBARA

COMBINING STATEMENT OF REVENUES, EXPENSES,

AND CHANGES IN NET POSITION

NONMAJOR ENTERPRISE FUNDS
YEAR ENDED JUNE 30, 2022
(179)
Downtown Golf Clean
Parking Course Energy Total

OPERATING REVENUES
Service Charges 5,707,737 $ 3,876,157 $ 14,718,475 $ 24,302,369 $ Leases and Rents 158,200 236,376 - 394,576
Other Revenues 216,183 116,084 - 332,267
Total Operating Revenues 6,082,120 4,228,617 14,718,475 25,029,212

OPERATING EXPENSES
Salaries, Wage, and Benefits 3,578,257 56,733 394,251 4,029,241 Material, Supplies, and Services 4,124,430 3,013,377 15,627,191 22,764,998 Depreciation 1,237,273 249,277 - 1,486,550
Total Operating Expenses 8,939,960 3,319,387 16,021,442 28,280,789 OPERATING INCOME (LOSS) 909,230 (2,857,840) (1,302,967) (3,251,577)

NONOPERATING REVENUES (EXPENSES)
Investment Income (Loss) (88,357) (64,366) 73 (152,650) Interest Expense - (21,308) - (21,308)
Total Nonoperating Revenues (Expenses) (88,357) (85,674) 73 (173,958) INCOME (LOSS) BEFORE TRANSFERS 823,556 (2,946,197) (1,302,894) (3,425,535)

TRANSFERS
Transfers in 2,306,293 - 2,891 2,309,184
Transfers out (4,675) - - (4,675)
Total Transfers 2,301,618 - 2,891 2,304,509
CHANGES IN NET POSITION 823,556 (644,579) (1,300,003) (1,121,026) Total Net Position - Beginning of Year 36,094,336 2,291,471 (224,515) 38,161,292 TOTAL NET POSITION - END OF YEAR $ 3,115,027 35,449,757 $ (1,524,518) $ 37,040,266 $

CITY OF SANTA BARBARA

COMBINING STATEMENT CASH FLOWS

NONMAJOR ENTERPRISE FUNDS
YEAR ENDED JUNE 30, 2022
(180)
Downtown Golf Clean
Parking Course Energy Total

CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from Customers and Users 6,225,938 $ 4,174,910 $ 9,446,184 $ 19,847,032 $ Payments to Suppliers of Goods or Services (4,106,231) (10,319,838 (2,842,143) (17,268,212 ) ) Payments to Employees (4,130,499) (152,855 (77,685) (4,361,039 ) ) Receipts from Others 216,183 116,084 - 332,267
Net Cash Provided (Used) by
Operating Activities (1,794,609 1,371,166 (1,026,509 ) ) (1,449,952)

CASH FLOWS FROM NONCAPITAL

FINANCING ACTIVITIES
Cash Received from Other Funds 2,306,293 - 2,891 2,309,184 Cash Paid to Other Funds (4,675 - ) - (4,675)
Advance from (to) Other Funds - (27,391 1,610,232 ) 1,582,841 Net Cash Provided (Used) by
Noncapital Financing Activities 2,301,618 (27,391 1,613,123 ) 3,887,350

CASH FLOWS FROM CAPITAL AND

RELATED FINANCING ACTIVITIES
Acquisition of Capital Assets (343,883) - (408,921) (752,804 ) Interest Paid - - (21,308) (21,308)
Net Cash Used by Capital and
Related Financing Activities (343,883) - (430,229) (774,112 )

CASH FLOWS FROM INVESTING ACTIVITIES
Change in Fair Value (176,594) - (106,290) (282,884 )
Interest Received 88,237 41,924 73 130,234
Net Cash Provided (Used) by
Investing Activities (88,357) 73 (64,366) (152,650 )

NET INCREASE IN
CASH AND CASH EQUIVALENTS 849,180 74,769 586,687 1,510,636 Cash and Cash Equivalents - Beginning of Year 4,842,404 2,105,000 96,732 7,044,136 CASH AND CASH EQUIVALENTS - END OF YEAR $ 2,954,180 4,917,173 $ 683,419 $ 8,554,772 $ (Continued)

CITY OF SANTA BARBARA

COMBINING STATEMENT CASH FLOWS (CONTINUED)

NONMAJOR ENTERPRISE FUNDS
YEAR ENDED JUNE 30, 2022
(181)
Downtown Golf Clean
Parking Course Energy Total

RECONCILIATION OF OPERATING INCOME (LOSS)

TO NET CASH PROVIDED (USED) BY
OPERATING ACTIVITIES:

Operating Income (Loss) $ 909,230 (2,857,840) $ (1,302,967 $ (3,251,577 ) $ ) Adjustments to Reconcile Operating Income (Loss)
to Net Cash Provided (Used) by Operating Activities:

Depreciation and Amortization 1,237,273 249,277 - 1,486,550 Accounts Receivable 405,171 64,353 (5,272,291) (4,802,767) Lease Receivable (1,321,288) - (1,877,685 (556,397) )
Inventory - - (5,341) (5,341)
Prepaid Assets - 5,639 (136,682) (131,043)
Deferred Outflows - Pension Related 47,277 (41,713 (3,972) 1,592 ) Accounts Payable 18,199 (11,410 5,444,035 ) 5,450,824
Salaries and Benefits Payable (101,840 60 ) 5,205 (96,575 ) Deposits Payable 10,337 (2,735) - 7,602
Lease Payable - 182,346 - 182,346
Compensated Absences Payable 49,002 - 5,233 54,235
Unearned Revenue - 9,429 - 9,429
Net Pension Liability (1,852,666) 182,583 (58,494) (1,728,577 ) Deferred Inflows - Lease Related 1,278,853 534,655 - 1,813,508 Deferred Inflows - Pension Related 1,305,985 41,454 90,088 1,437,527 Total Adjustments 1,063,231 461,936 276,458 1,801,625
Net Cash Provided (Used) by
Operating Activities (1,794,609 $ 1,371,166 ) $ (1,026,509 $ (1,449,952 ) $ ) (182)
(183)

INTERNAL SERVICE FUNDS
(184)

CITY OF SANTA BARBARA, CALIFORNIA

INTERNAL SERVICE FUNDS
JUNE 30, 2022
(185)
Intra-City Service Fund – To account for the operating and capital costs of City-wide building maintenance operations, custodial services, and communications.

Self-Insurance Fund – To account for the cost of providing workers’ compensation, unemployment, liability, employee health insurance coverage, and other postemployment benefits, on a City-wide basis.

Postemployment Benefits Fund – To account for the cost of retiree health insurance coverage, and other postemployment benefits, on a City-wide basis.

Information Systems Fund – To account for the cost of providing computer equipment and service to all departments and funds within the City.

Vehicle Capital Fund – To account for the costs of operating an automotive maintenance facility, maintaining all City departmental vehicles, and purchasing new vehicles for use within the City-wide organization.

Energy Management Fund – To account for the costs to provide energy efficiency and conservation management, energy generation project management, and electric and gas utility coordination for all City departments.

CITY OF SANTA BARBARA

COMBINING STATEMENT OF NET POSITION

INTERNAL SERVICE FUNDS
JUNE 30, 2022
(186)
Intra-City Postemployment Information Vehicle Energy
Service Self-Insurance Benefits Systems Capital Management Total ASSETS
CURRENT ASSETS:

Pooled Cash and Investments 2,165,773 $ 6,862,406 $ - $ 2,393,998 $ 18,199,162 $ 1,133,183 $ 30,754,522 $ Accounts Receivable, Net 988 106,038 - - 22,577 - 129,603 Prepaids Assets and Deposits 591,413 1,755,438 - - 245,058 - 2,591,909 Total Current Assets 2,758,174 8,723,882 - 2,393,998 18,466,797 1,133,183 33,476,034 NONCURRENT ASSETS Advance to Other Funds - - - - 2,122,416 - 2,122,416 Capital Assets:

Nondepreciable - - - - 4,651,749 - 4,651,749 Depreciable, Net 5,415,200 - - 2,464,990 8,143,827 - 16,024,017 Total Capital Assets, Net 5,415,200 - - 2,464,990 12,795,576 - 22,798,182 Total Noncurrent Assets 5,415,200 - - 2,464,990 14,917,992 - 22,798,182 Total Assets 8,173,374 8,723,882 - 4,858,988 33,384,789 1,133,183 56,274,216 DEFERRED OUTFLOWS OF RESOURCES Pension Related 860,258 194,154 - 626,123 379,127 122,156 2,181,818 OPEB Related - - 12,943,283 - - - 12,943,283 Total Deferred Outflows of Resources 860,258 194,154 12,943,283 626,123 379,127 122,156 15,125,101 LIABILITIES

CURRENT LIABILITIES
Accounts Payable 309,129 1,390,452 - 36,832 508,718 181,697 2,426,828 Salaries and Benefits Payable 97,880 21,127 151,728 71,394 37,408 13,928 393,465 Unearned Revenue - - - - - 78,600 78,600 Deposits - - - - - - - Interfund Payables - - 2,495,496 - - - 2,495,496
Current Portion Long-Term Debt - - - - 518,364 - 518,364 Compensated Absences Payable 259,783 50,349 - 160,033 82,155 56,100 608,420 Claims Payable - 5,625,607 - - - - 5,625,607 Total OPEB Liability, due in one year - - 2,234,742 - - - 2,234,742 Total Current Liabilities 666,792 7,087,535 4,881,966 268,259 1,146,645 330,325 14,381,522 NONCURRENT LIABILITIES Advances from Other Funds - - - - - 24,140 24,140 Compensated Absences Payable 28,865 5,594 - 20,004 9,128 6,233 69,824 Long-Term Debt, Net of Current Portion - - - - 3,275,011 - 3,275,011 Claims Payable - 12,698,179 - - - - 12,698,179 Net Pension Liability 5,074,165 576,339 - 2,156,478 1,903,008 534,693 10,244,683 Total Other Postemployment Benefit Liability - - 51,689,983 - - - 51,689,983 Total Noncurrent Liabilities 5,103,030 13,280,112 51,689,983 2,176,482 5,187,147 565,066 78,001,820 Total Liabilities 5,769,822 20,367,647 56,571,949 2,444,741 6,333,792 895,391 92,383,342 DEFERRED INFLOWS OF RESOURCES Pension Related 1,857,908 419,317 - 1,352,243 818,804 263,821 4,712,093 OPEB Related - - 8,368,983 - - - 8,368,983 Total Deferred Inflows of Resources 1,857,908 419,317 8,368,983 1,352,243 818,804 263,821 13,081,076 NET POSITION Net Investment In Capital Assets 5,415,200 - - 2,464,990 12,485,992 - 20,366,182 Unrestricted (4,009,298) (11,868,928) (51,997,649) (776,863) 14,125,328 96,127 (54,431,283) Total Net Position 1,405,902 $ (11,868,928) $ (51,997,649) $ 1,688,127 $ 26,611,320 $ 96,127 $ (34,065,101) $

CITY OF SANTA BARBARA

COMBINING STATEMENT OF REVENUES, EXPENSES,

AND CHANGES IN NET POSITION

INTERNAL SERVICE FUNDS
YEAR ENDED JUNE 30, 2022
(187)
Intra-City Postemployment Information Vehicle Energy
Service Self-Insurance Benefits Systems Capital Management Total

OPERATING REVENUES
Service Charges 6,084,340 $ 9,788,654 $ 1,993,186 $ 4,485,983 $ 6,088,383 $ 2,460,073 $ 30,900,619 $ Other Revenues 275,525 - - - 391,433 - 666,958 Total Operating Revenues 6,359,865 9,788,654 1,993,186 4,485,983 6,479,816 2,460,073 31,567,577 OPERATING EXPENSES Salaries, Wages, and Benefits 3,216,731 592,455 7,335,169 2,060,854 1,376,887 1,158,360 15,740,456 Materials, Supplies, and Services 2,834,018 12,026,287 - 2,020,987 2,008,605 1,642,216 20,532,113 Depreciation 248,229 - - 442,836 1,670,905 - 2,361,970 Total Operating Expenses 6,298,978 12,618,742 7,335,169 4,524,677 5,056,397 2,800,576 38,634,539 OPERATING INCOME (LOSS) (2,830,088) 60,887 (5,341,983) (38,694) 1,423,419 (340,503) (7,066,962) NONOPERATING REVENUES Interest Income - (205,949) - - (473,337) - (679,286)
Interest Expense - - - - (9,038) (9,038) Total Nonoperating Revenues - (205,949) - - (482,375) - (688,324)

INCOME (LOSS) BEFORE
TRANSFERS (3,036,037) 60,887 (5,341,983) (38,694) 941,044 (340,503) (7,755,286) CONTRIBUTIONS Capital Contributions - - - - - - - Total Contributions - - - - - - - TRANSFERS Transfers in 80,526 518,889 - 291,255 90,196 11,565 992,431 Transfers out (7,198) (818) - (38,354) (1,116,772) (869) (1,164,011) Total Transfers 73,328 518,071 - 252,901 (1,026,576) 10,696 (171,580) CHANGES IN NET POSITION (2,517,966) 134,215 (5,341,983) 214,207 (85,532) (329,807) (7,926,866) Total Net Position - Beginning of Year (Deficit) 1,271,687 (9,350,962) (46,655,666) 1,473,920 26,696,852 425,934 (26,138,235) TOTAL NET POSITION - END OF YEAR (DEFICIT) $ (11,868,928) 1,405,902 $ (51,997,649) $ 1,688,127 $ 26,611,320 $ 96,127 $ (34,065,101) $

CITY OF SANTA BARBARA

COMBINING STATEMENT OF CASH FLOWS

INTERNAL SERVICE FUNDS
YEAR ENDED JUNE 30, 2022
(188)
Intra-City Postemployment Information Vehicle Energy
Service Self-Insurance Benefits Systems Capital Management Total

CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from Customers and Users 6,084,440 $ 9,790,234 $ 1,993,186 $ 4,485,983 $ 6,084,293 $ 2,369,920 $ 30,808,056 $ Payments to Suppliers of Goods or Services (2,702,475) (10,910,132) - (2,146,502) (1,799,455) (1,593,384) (19,151,948) Payments to Employees (3,934,237) (792,703) (2,964,586) (2,623,766) (1,666,266) (462,331) (12,443,889) Receipts from (Payments to) Others 275,525 - - - 391,433 - 666,958 Net Cash Provided (Used) by Operating Activities (276,747) (1,912,601) (971,400) (284,285) 3,010,005 314,205 (120,823) CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:

Cash Transfers in 80,526 518,889 - 291,255 90,196 11,565 992,431 Cash Transfers out (7,198) (818) - (38,354) (1,116,772) (869) (1,164,011) Advance from (to) Other Funds - - 971,400 (41,616) (24,140) 905,644 Net Cash Provided (Used) by Noncapital Financing Activities 73,328 518,071 971,400 252,901 (1,068,192) (13,444) 734,064 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES:

Acquisition of Capital Assets - 52,136 - (679,844) (1,678,862) - (2,306,570) Principal Paid on Capital Debt - - - - (95,370) - (95,370) Net Cash Provided (Used) by Capital and Related Financing Activities - 52,136 - (679,844) (1,774,232) - (2,401,940) CASH FLOWS FROM INVESTING

ACTIVITIES
Change in Fair Value - (247,072) - - (611,325) - (858,397) Interest Received - 41,123 - - 137,988 - 179,111 Net Cash Used by Investing Activities - (205,949) - - (473,337) - (679,286) NET CHANGE IN CASH AND CASH EQUIVALENTS (1,548,343) (203,419) - (711,228) (305,756) 300,761 (2,467,985) Cash and Cash Equivalents - Beginning of Year 2,369,192 8,410,749 - 3,105,226 18,504,918 832,422 33,222,507 CASH AND CASH EQUIVALENTS - END OF YEAR $ 6,862,406 2,165,773 $ - $ 2,393,998 $ 18,199,162 $ 1,133,183 $ 30,754,522 $ (Continued)

CITY OF SANTA BARBARA

COMBINING STATEMENT OF CASH FLOWS (CONTINUED)

INTERNAL SERVICE FUNDS
YEAR ENDED JUNE 30, 2022
(189)
Intra-City Postemployment Information Vehicle Energy
Service Self-Insurance Benefits Systems Capital Management Total

RECONCILIATION OF OPERATING INCOME
(LOSS) TO NET CASH PROVIDED BY
OPERATING ACTIVITIES:

Operating Income (Loss) 60,887 $ (2,830,088) $ (5,341,983) $ (38,694) $ 1,423,419 $ (340,503) $ (7,066,962) $ Adjustments to Reconcile Operating Income (Loss)
to Net Cash Provided (Used) by Operating Activities:

Depreciation and Amortization 248,229 - - 442,836 1,670,905 - 2,361,970 (Increase) Decrease in Operating Assets and Deferred Outflows of Resources:

Accounts Receivable 100 1,580 - - (4,090) 847 (1,563) Prepaid Assets 75,359 143,957 - - (97,875) - 121,441 Deferred Outflows of Resources - Pension Related 114,340 (10,609) - 17,577 119,805 (36,846) 204,267 Deferred Outflows of Resources - OPEB Related - - (1,857,407) - - - (1,857,407) Increase (Decrease) in Operating Liabilities and
Deferred Inflows of Resources:

Accounts Payable 56,184 1,035,074 - (125,515) 307,025 48,832 1,321,600 Deposits Payable - (234) - - - - (234) Salaries and Benefits Payable (92,070) (20,271) 14,500 (51,913) (54,916) (12,903) (217,573) Unearned Revenue - - - - - (91,000) (91,000) Compensated Absences Payable 24,265 1,604 - 24,872 (14,746) 34,504 70,499 Net Pension Liability (2,582,663) (582,890) - (1,879,743) (1,138,214) 450,892 (5,732,618) Total Other Postemployment Benefit Liability - - (252,493) - - - (252,493) Claims and Judgements - (62,642) - - - - (62,642) Deferred Inflows of Resources - Pension Related 1,818,622 411,918 - 1,326,295 798,692 260,382 4,615,909 Deferred Inflows of Resources - OPEB Related - - 6,465,983 - - - 6,465,983 Total Adjustments (337,634) 917,487 4,370,583 (245,591) 1,586,586 654,708 6,946,139 Net Cash Provided (Used) by Operating Activities (276,747) $ (1,912,601) $ (971,400) $ (284,285) $ 3,010,005 $ 314,205 $ (120,823) $ (190)
(191)

FIDUCIARY FUNDS
(192)

CITY OF SANTA BARBARA, CALIFORNIA

FIDUCIARY FUNDS
JUNE 30, 2022
(193)

CUSTODIAL FUNDS
Revolving Rehabilitation Loan Fund – To account for moneys received from various public agencies for funding of rehabilitation loans to low- and moderate-income applicants.

Law Enforcement Telecommunication System Fund – To account for moneys received from various participating public agencies for the purchase of computer equipment for communication with the California Law Enforcement Tracking System (CLETS).

Seismic Safety Assessment Fund – To account for the financial activities of the Seismic Assessment District #1.

CITY OF SANTA BARBARA

COMBINING STATEMENT OF FIDUCIARY NET POSITION

CUSTODIAL FUNDS
JUNE 30, 2022
(194)
California Law Total
Revolving Enforcement Seismic Safety Custodial
Rehab Telecommunications Assessment Funds
ASSETS
Current Assets:

Pooled Cash and Investments 487,961 $ - $ - $ 487,961 $ Accounts Receivable, Net - 72,122 - 72,122
Loans Receivable 2,142,478 - - 2,142,478
Total Assets 2,630,439 $ 72,122 $ - $ 2,702,561 $

LIABILITIES
Current Liabilities:

Accounts Payable 27,556 $ - $ - $ 27,556 $
Due to the City Of Santa Barbara - 16,248 - 16,248
Total Liabilities 27,556 16,248 - 43,804

NET POSITION
Restricted for Housing Assistance 2,602,883 - - 2,602,883 Restricted for Law Enforcement - 55,874 - 55,874
Restricted for Seismic Activities - - - -
Total Net Position 2,602,883 $ 55,874 $ - $ 2,658,757 $

CITY OF SANTA BARBARA

COMBINING STATEMENT OF CHANGES IN FIDUCIARY NET POSITION

CUSTODIAL FUNDS
YEAR ENDED JUNE 30, 2022
(195)
California Law Total
Revolving Enforcement Seismic Safety Custodial
Rehab Telecommunications Assessment Funds

ADDITIONS
Interest Income 63,890 $ 39 $ - $ 63,929 $
Charges for Services - 153,772 - 153,772
Total Additions 63,890 153,811 - 217,701 DEDUCTIONS
Administrative Expenses 72,104 115,843 - 187,947 Program Expenses 662,158 37,614 204,017 903,789 Total Liabilities 734,262 153,457 204,017 1,091,736 Change in Net Position 354 (670,372) (204,017) (874,035) Total Net Position, Beginning of
Year 55,520 3,273,255 204,017 3,532,792 Total Net Position, End of Year $ 55,874 2,602,883 $ - $ 2,658,757 $ (196)
(197)

STATISTICAL SECTION
(198)

CITY OF SANTA BARBARA, CALIFORNIA

STATISTICAL SECTION (UNAUDITED)

CONTENTS
(199)
This part of the City of Santa Barbara’s Annual Comprehensive Financial Report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the City’s overall financial health.

Contents Page
Financial Trends
These schedules contain trend information to help the reader understand how the City’s financial performance and well-being have changed over time. 201 Revenue Capacity
These schedules contain trend information to help the reader assess the City’s most significant local revenue source, the property tax. 204 Debt Capacity
These schedules present information to help the reader assess the affordability of the City’s current levels of outstanding debt and the City’s ability to issue additional debt in the future. 212
Demographic and Economic Information
These schedules offer demographic and economic indicators to help the reader understand the environment within which the City’s financial activities take place. 218 Operating Information
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 City provides and the activities it performs. 220
Sources: Unless otherwise noted, the information in these schedules is derived from the Annual Comprehensive Financial Reports for the relevant year. (200)
l

CITY OF SANTA BARBARA

NET POSITION BY COMPONENT

LAST TEN FISCAL YEARS
(ACCRUAL BASIS OF ACCOUNTING
(AMOUNTS EXPRESSED IN THOUSANDS)
(201)
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Governmental activities
Net investment in capital assets $312,891 $362,540 $381,554 $427,683 $436,966 $443,975 $465,776 $493,238 $498,799 $518,120 Restricted 66,510 65,614 81,979 80,934 65,647 81,702 82,205 87,096 97,387 105,464 Unrestricted 42,378 45,146 (190,965) (186,953) (164,523) (189,963) (211,108) (235,289) (233,861) (216,208) Total governmental activities net position $421,779 $473,300 $272,568 $321,664 $338,090 $335,714 $336,873 $345,045 $362,325 $407,376 Business-type activities
Net investment in capital assets $300,997 $340,246 $347,257 $361,076 $365,505 $359,890 $380,202 $384,837 $391,224 $398,278 Restricted 1,358 3,659 3,794 11,962 13,546 13,052 9,349 10,457 5,662 5,663 Unrestricted 98,908 95,656 43,114 37,996 57,464 78,131 68,259 97,205 109,747 143,206 Total business-type activities net position $401,263 $439,561 $394,165 $411,034 $436,515 $451,073 $457,810 $492,499 $506,633 $547,147 Primary government
Net investment in capital assets $613,888 $702,786 $728,811 $788,759 $802,471 $803,865 $845,978 $878,075 $890,023 $916,398 Restricted 67,868 69,273 85,773 92,896 79,193 94,754 91,554 97,553 103,049 111,127 Unrestricted 141,286 140,802 (147,851) (148,957) (107,059) (111,832) (142,849) (138,084) (124,114) (73,002) Total primary government net position $823,042 $912,861 $666,733 $732,698 $774,605 $786,787 $794,683 $837,544 $868,958 $954,523

CITY OF SANTA BARBARA

CHANGES IN NET POSITION

LAST TEN FISCAL YEARS
(ACCRUAL BASIS OF ACCOUNTING
(AMOUNTS EXPRESSED IN THOUSANDS)
(202)
Expenses 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Governmental activities:

Administration $11,851 $14,650 $17,100 $16,179 $16,612 $20,045 $19,586 $20,956 $19,964 $19,177 Public safety 61,719 66,525 65,260 63,451 66,678 82,485 79,814 90,295 88,435 90,023 Public works 25,252 24,552 29,672 26,053 28,565 34,583 44,753 40,103 46,787 37,767 Community services 24,104 24,083 25,377 26,454 27,635 30,500 25,777 25,294 27,392 24,973 Community development 11,864 13,567 12,077 16,933 17,442 16,083 18,753 18,182 19,434 15,459 Sustainability and Resilience - - - - - - - - 38 110
Interest on long-term debt 82 74 56 42 66 - - - - -
Total governmental activities expenses 134,872 143,451 149,542 149,112 156,998 183,696 188,683 194,830 202,050 187,509 Business-type activities:

Water 32,214 35,316 40,409 35,859 37,291 45,239 51,504 50,122 52,502 50,913 Wastewater 17,217 16,930 17,242 17,376 18,299 20,542 20,828 22,794 23,906 22,307 Airport 21,376 20,557 21,616 21,361 22,057 24,507 26,139 26,745 26,066 27,530 Waterfront 12,026 12,707 12,179 12,639 12,975 15,010 15,861 15,710 15,418 14,387 Solid Waste 19,124 19,732 20,353 20,498 20,837 23,948 24,325 27,146 31,245 30,333 Parking 7,359 7,693 8,325 7,941 8,481 10,104 10,277 9,758 9,138 9,173 Golf course 1,949 1,820 2,018 2,022 2,591 2,642 2,625 2,358 3,446 3,401 Clean Energy - - - - - - - - 132 16,021
Total business-type activities expenses 111,265 114,755 122,142 117,696 122,531 141,992 151,559 154,633 161,853 174,065 Total primary government expenses $246,137 $258,206 $271,684 $266,808 $279,529 $325,688 $340,242 $349,463 $363,903 $361,574 Program Revenues
Governmental activities:

Charges for services:

Administration $1,259 $2,008 $4,851 $4,479 $4,143 $3,826 $2,043 $2,273 $1,757 $3,659 Public safety 10,538 13,627 10,794 10,650 11,758 12,141 5,838 5,464 5,025 5,965 Public works 8,789 9,434 8,945 9,161 9,586 9,333 7,282 6,615 7,534 7,558 Community services 5,532 7,934 10,869 11,909 12,400 12,629 6,416 5,471 5,201 7,397 Community development 5,095 5,348 5,347 6,540 6,081 6,916 5,529 5,091 5,717 7,441 Operating grants and contributions 13,251 14,490 6,303 8,487 7,882 10,462 20,162 19,508 33,100 22,360 Capital grants and contributions 8,474 10,517 24,137 26,181 16,966 16,301 24,112 23,446 21,274 22,688 Total governmental activities program revenues 52,938 63,358 71,246 77,407 68,816 71,608 71,382 67,868 79,608 77,068 Business-type activities:

Charges for services:

Water 38,171 36,368 34,573 45,097 51,641 56,117 54,622 60,133 65,633 69,058 Wastewater 17,658 17,991 17,742 18,632 20,142 20,738 21,402 22,990 24,474 25,807 Airport 17,740 17,910 17,902 17,988 19,175 20,650 23,205 23,275 19,596 25,920 Waterfront 12,782 13,776 14,982 14,658 15,075 14,815 14,639 14,215 15,644 17,241 Solid Waste 19,354 20,689 20,827 21,059 20,953 22,116 24,191 27,455 29,817 34,294 Parking 7,691 7,955 8,432 8,457 8,514 8,285 8,473 6,383 4,355 6,082 Golf course 1,833 2,031 1,950 1,950 2,531 2,607 2,629 2,681 4,079 4,229 Clean Energy - - - - - - - - 100 14,718
Operating grants and contributions - - - 24 23 23 23 23 8,742 17,913 Capital grants and contributions 4,256 3,663 3,289 5,582 496 8,640 2,220 46 3,565 292 Total business-type activities program revenues 119,485 120,383 119,697 133,447 138,550 153,991 151,404 157,201 176,005 215,554 Total primary government program revenues $172,423 $183,741 $190,943 $210,854 $207,366 $225,599 $222,786 $225,069 $255,613 $292,622 Fiscal Years

CITY OF SANTA BARBARA

CHANGES IN NET POSITION (CONTINUED)

LAST TEN FISCAL YEARS
(ACCRUAL BASIS OF ACCOUNTING
(AMOUNTS EXPRESSED IN THOUSANDS)
(203)
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Net (expense)/revenue
Governmental activities ($81,934) ($80,093) ($78,296) ($71,705) ($88,182) ($112,088) ($117,301) ($126,962) ($122,442) ($110,441) Business-type activities 8,220 5,628 (2,445) 15,751 16,019 11,999 (155) 2,568 10,044 41,489 Total primary government net expense ($73,714) ($74,465) ($80,741) ($55,954) ($72,163) ($100,089) ($117,456) ($124,394) ($112,398) ($68,952) General Revenues and Other
Changes in Net Position
Governmental activities:

Taxes
Property $27,575 $26,555 $27,691 $29,382 $31,612 $34,928 $35,187 $38,148 $39,862 $42,226 Transient occupancy 20,186 17,611 22,527 22,379 23,110 22,650 23,421 18,168 18,807 31,956 Sales & use 20,134 21,323 21,958 21,932 21,807 25,203 48,603 44,533 49,770 59,328 Business license 2,345 2,555 2,574 2,636 2,651 2,786 2,725 2,765 2,543 2,667 Utility users 14,054 14,016 13,810 14,338 14,014 14,149 13,888 14,120 14,674 15,610 Real property transfer 642 669 692 730 762 795 863 658 1,144 1,353 Other taxes - - - - - 11 94 1,055 1,921 1,672
Franchise fees 3,579 3,822 3,751 3,132 4,231 3,597 3,637 3,635 3,852 6 Unrestricted motor vehicle license-in-lieu 77 40 39 37 42 49 46 74 69 4,176 Investment income 2,521 2,165 2,030 2,288 1,733 2,172 4,137 4,291 2,478 108 Other revenue 6,193 660 669 419 2,610 11,289 57 8,982 90 Extraordinary gain - 38,084 ² 23,054 - 1,335 - - - - 745 Extraordinary loss - - - - - - - - - -
Gain/loss on sale of capital assets (695) - - 44 404 - - - - - Transfers 748 918 342 433 299 (462) (277) (165) 625 (2,693) Total governmental activities 94,784 130,995 96,083 120,804 # 104,610 117,167 # 132,381 136,264 135,835 155,493 Business-type activities:

Investment earnings 582 1,562 1,218 1,304 556 724 4,574 3,952 419 (3,858) Other revenue - 221 555 248 9,205 1,372 1,914 28,873 4,296 189 Extraordinary gain - 28,956 ² - - - - - - - -
Transfers (748) (918) (342) (433) (299) 462 277 165 (625) 2,693 Total business-type activities (166) 29,821 1,431 1,119 9,462 2,558 6,765 32,990 4,090 (976) Total primary government $94,618 $160,816 $97,514 $121,923 $114,072 $119,725 $139,146 $169,254 $139,925 $154,517 Change in Net Position
Governmental activities $12,850 $50,902 $17,787 $49,099 $16,429 $5,079 $15,080 $9,302 $13,393 $45,052 Business-type activities 8,054 35,449 (1,014) 16,870 25,481 14,557 6,610 35,558 14,134 40,513 Total primary government $20,904 $86,351 $16,773 $65,969 $41,909 $19,636 $21,690 $44,860 $27,527 $85,565 Note: Description of extraordinary gain / loss
¹ Extraordinary loss of dissolution of RDA
² Extraordinary gain from Successor Agency property transfer Fiscal Year

CITY OF SANTA BARBARA

GOVERNMENTAL ACTIVITIES TAX REVENUES BY SOURCE

LAST TEN FISCAL YEARS
(ACCRUAL BASIS OF ACCOUNTING
(AMOUNTS EXPRESSED IN THOUSANDS)
(204)
Real Sales Transient Utility Trans- Business Property
Fiscal Property & Use Occupancy Users portation License Transfer Cannabis Other Year Tax Tax Tax Tax Tax Tax Tax Tax Tax Total 2013 27,575 20,134 17,611 14,054 3,322 2,345 642 - - 85,683 2014 26,555 21,323 20,186 14,016 3,488 2,555 669 - - 88,792 2015 27,691 21,958 22,527 13,810 3,637 2,574 692 - - 92,889 2016 29,382 21,932 22,379 14,338 3,689 2,636 730 - - 95,086 2017 31,612 21,807 23,110 14,014 3,746 2,651 762 - - 97,702 2018 34,928 25,203 (1) 22,650 14,149 3,954 2,785 795 11 (2) - 104,475 2019 35,187 48,603 23,421 13,888 4,141 2,725 863 79 15 128,922 2020 38,148 44,465 18,168 14,137 4,100 2,765 658 1,052 3 123,496 2021 39,862 49,770 18,807 14,674 4,438 2,543 1,144 1,920 - 133,159 2022 42,226 59,328 31,956 15,610 5,304 2,667 1,353 1,672 6 160,122 Source: FY 22, Munis reporting. (1) Measure C, a 1% sales and use tax increase, became effective April 1, 2018. (2) Cannabis Taxes commenced in FY2018 following State ballot measure to legalize Cannabis production and retail.

CITY OF SANTA BARBARA FUND BALANCES OF GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (MODIFIED ACCRUAL BASIS OF ACCOUNTING (AMOUNTS EXPRESSED IN THOUSANDS) (205) CITY OF SANTA BARBARA CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (MODIFIED ACCRUAL BASIS OF ACCOUNTING (AMOUNTS EXPRESSED IN THOUSANDS) (206) CITY OF SANTA BARBARA CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS (CONTINUED) LAST TEN FISCAL YEARS (MODIFIED ACCRUAL BASIS OF ACCOUNTING (AMOUNTS EXPRESSED IN THOUSANDS) (207)

CITY OF SANTA BARBARA

ASSESSED VALUE AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY

LAST TEN FISCAL YEARS
(AMOUNTS EXPRESSED IN THOUSANDS)
(208)
Net Taxable Total
Fiscal SBE Assessed Direct Tax
Year Secured Unsecured Nonunitary Value Rate
2013 $ 897,146 14,450,300 $ - $ 15,347,446 $ 1.00%
2014 916,616 15,115,761 - 16,032,377 1.00%
2015 950,610 15,828,353 - 16,778,963 1.00%
2016 1,000,471 16,893,957 - 17,894,428 1.00%
2017 1,002,168 17,897,470 - 18,899,638 1.00%
2018 1,046,971 18,999,710 - 20,046,681 1.00%
2019 1,058,569 20,146,839 - 21,205,408 1.00%
2020 1,074,831 21,207,130 - 22,281,961 1.00%
2021 1,125,860 22,473,303 - 23,599,163 1.00%
2022 1,200,282 23,186,266 - 24,386,548 1.00%
Notes:

Exempt values are not included in Total
HDL Coren & Cone Data Source: Santa Barbara County Assessor 2012/13 - 2021/22 Combined Tax Rolls.

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 reassessed at the time that it is sold to a new owner. At that point, the new assessed value is reassessed 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.

In Fiscal Year 2018, the City engaged HDL, Coren & Cone to provide data for the statistical section of the Annual Comprehensive Financial Report. Historical data was updated based upon this information.

CITY OF SANTA BARBARA DIRECT AND OVERLAPPING PROPERTY TAX RATES (RATE PER $100 OF TAXABLE VALUE) LAST TEN FISCAL YEARS (209)

CITY OF SANTA BARBARA

PRINCIPAL PROPERTY TAXPAYERS

CURRENT YEAR AND NINE YEARS AGO
(AMOUNTS EXPRESSED IN THOUSANDS)
(210)
Percentage of
Taxable Net Total Taxable
Assessed Net Assessed
Taxpayer Value Value
Levon Investments LLC $148,501 0.61%
Fess Parker Doubletree Hotel 113,853 0.47%
KHP IV Santa Barbara LLC 95,990 0.39%
Paseo Nuevo Owner LLC 88,391 0.36%
XHR Santa Barbara LLC 87,253 0.36%
El Encanto Inc 81,285 0.33%
Dario L Pini Trust 71,397 0.29%
HC Assetco 69,340 0.28%
MCC BB Property LLC 66,227 0.27%
Hitchcock Holdings LLC 61,972 0.25%
$884,209 3.63%
Percentage of
Taxable Net Total Taxable
Assessed Net Assessed
Taxpayer Value Value
Fess Parker Doubletree Hotel $84,187 0.55%
Levon Investments LLC 81,628 0.53%
Dario Pini 54,704 0.36%
FW CA-Five Points Shopping Center LLC 51,939 0.34%
Hitchcock Holdings LLC 50,690 0.33%
Estate of Huguette M Clark 45,900 0.30%
I and G Direct Real Estate 3 LP 44,003 0.29%
MCC BB Property LLC 42,863 0.28%
Patricia S Nettleship Trustee 38,170 0.25%
KHP II Canary 34,612 0.23%
$528,696 3.44%
Notes:

Fiscal Year 2022
HDL Coren & Cone Data Source: Santa Barbara County Assessor 2012/13 and 2021/22 Combined Tax Rolls and the SBE Non Unitary Tax Roll.

In Fiscal Year 2018, the City engaged HdL, Coren & Cone to provide data for the statistical section of the Comprehensive Annual Financial Report. Historical data was updated based upon this information.

Fiscal Year 2013

CITY OF SANTA BARBARA

PROPERTY TAX LEVIES AND COLLECTIONS

LAST TEN FISCAL YEARS
(AMOUNTS EXPRESSED IN THOUSANDS)
(211)
Fiscal Year Total Tax Collections
Ended Levy for in Subsequent
June 30 Fiscal Year Amount Percentage of Levy Years Amount Percentage of Levy 2013 $ 27,575 27,575 $ 100% - 27,575 $ 100%
2014 26,555 26,555 100% - 26,555 100%
2015 27,691 27,691 100% - 27,691 100%
2016 29,382 29,382 100% - 29,382 100%
2017 31,612 31,612 100% - 31,612 100%
2018 34,928 34,928 100% - 34,928 100%
2019 35,187 35,187 100% - 35,187 100%
2020 38,148 38,148 100% - 38,148 100%
2021 39,862 39,862 100% - 39,862 100%
2022 42,226 42,226 100% - 42,226 100%
Collected within the
Fiscal Year of the Levy Total Collections to Date

CITY OF SANTA BARBARA

RATIO OF OUTSTANDING DEBT BY TYPE

LAST TEN FISCAL YEARS
(AMOUNTS EXPRESSED IN THOUSANDS, EXCEPT PER CAPITA AMOUNT) (212)
Governmental Activities
Certificates Tax Certificates Total Percentage
Fiscal of Allocation Revenue of Primary of Personal Per Year Participation Bonds Loans Bonds Participation Loans Government Income1 Capita1 2013 $ - 1,555 $ - $ 60,384 $ 39,569 $ 45,071 $ 146,579 $ 4.48% 1,634 $ 2014 - 1,268 - 70,991 24,422 50,970 147,651 4.52% 1,634 2015 - 968 - 68,660 22,711 56,231 148,570 4.48% 1,640
2016 - 662 - 66,243 20,965 77,781 165,651 4.90% 1,778
2017 - - - 62,686 19,001 116,494 198,181 5.83% 2,130
2018 - - - 60,030 17,334 141,290 218,654 6.27% 2,306
2019 - - - 51,655 15,617 140,301 207,573 5.47% 2,219
2020 - - - 48,699 13,835 138,249 200,783 5.00% 2,147
2021 - - - 45,633 11,993 130,600 188,226 4.46% 2,023
2022 - - - 42,782 10,278 122,785 175,845 3.89% 2,031
Note: Details regarding the city's outstanding debt can be found in the notes to the financial statements. The amount of outstanding debt by type reported above is net of related premiums and discounts. 1 See the Schedule of Demographic and Economic Statistics for personal income and population data.

Business-Type Activities

CITY OF SANTA BARBARA

RATIO OF GENERAL BONDED DEBT OUTSTANDING

LAST TEN FISCAL YEARS
(AMOUNTS EXPRESSED IN THOUSANDS, EXCEPT PER CAPITA AMOUNT) (213)
Percentage of
Estimated
Certificates Tax Less: Amounts Actual Taxable
Fiscal of Allocation Available in Debt Value1
of Per
Year Participation Bonds Loans Service Fund Total Property Capita2 2013 $ - 1,555 $ - $ 561 $ 994 $ 0.01% 11
2014 - 1,268 - 561 707 0.00% 8
2015 - 968 - 580 388 0.00% 4
2016 - 662 - 576 86 0.00% 1
2017 - - - - - 0.00% 0
2018 - - - - - 0.00% 0
2019 - - - - - 0.00% 0
2020 - - - - - 0.00% 0
2021 - - - - - 0.00% 0
2022 - - - - - 0.00% 0
Note: Details regarding the city's outstanding debt can be found in the notes to the financial statements. 1 See the Schedule of Assessed Value and Estimated Actual Value of Taxable Property for property value data. 2 Population data can be found in the Schedule of Demographic and Economic Statistics.

CITY OF SANTA BARBARA LEGAL DEBT MARGIN INFORMATION LAST TEN FISCAL YEARS (AMOUNTS EXPRESSED IN THOUSANDS) (214) CITY OF SANTA BARBARA PLEDGE-REVENUE COVERAGE LAST TEN FISCAL YEARS (AMOUNTS EXPRESSED IN THOUSANDS) (215) CITY OF SANTA BARBARA PLEDGE-REVENUE COVERAGE LAST TEN FISCAL YEARS (AMOUNTS EXPRESSED IN THOUSANDS) (216) CITY OF SANTA BARBARA PLEDGE-REVENUE COVERAGE LAST TEN FISCAL YEARS (AMOUNTS EXPRESSED IN THOUSANDS) (217)

CITY OF SANTA BARBARA

DEMOGRAPHIC AND ECONOMIC STATISTICS

LAST TEN FISCAL YEARS
(218)
Per
Personal Capita June 30
Fiscal City Income Personal Unemployment
Year Population (1) (in thousands) (2) Income (2) Rate (3) 2013 89,681 3,270,666 $ 36,470 $ 4.2%
2014 90,385 3,268,683 36,164 3.8%
2015 90,612 3,315,221 36,587 4.9%
2016 93,190 3,379,787 36,267 4.2%
2017 93,063 3,397,602 36,508 4.0%
2018 94,807 3,486,408 36,773 3.3%
2019 93,532 3,797,190 40,597 2.6%
2020 93,511 4,012,701 42,911 2.3%
2021 93,055 4,224,865 45,401 7.0%
2022 86,591 4,515,159 52,143 4.3%
Notes:

HdL, Coren & Cone Data Sources:
(1) Population data: California State Department of Finance. (3) Unemployment data: California Employment Development Department.

In Fiscal Year 2018, the City engaged HdL, Coren & Cone to provide data for the statistical section of the Annual Comprehensive Financial Report.
(2) 2000-2009 Income data - ESRI - Demographic Estimates are based on the last available Census.

Projections are developed by incorporating all of the prior census data released to date. 2010 and later Income data - US Census Bureau, most recent American Community Survey.

CITY OF SANTA BARBARA

PRINCIPAL EMPLOYERS
TEN LARGEST EMPLOYERS – SOUTH SANTA BARBARA COUNTY

CURRENT YEAR AND NINE YEARS AGO
(219)
Percentage of Percentage of
Number of Total Number of Total
Employer Employees (1) Employment Employer Employees (1) Employment County of Santa Barbara 4,400 5.12% University of California, Santa Barbara 10,063 18.26% University of California, Santa Barbara 4,250 4.95% County of Santa Barbara 4,383 7.95% Cottage Health 3,052 3.55% Cottage Health System 2,845 5.16% Mission Linen Supply 2,000 2.33% Santa Barbara Unified School District 2,531 4.59% AppFolio 1,350 1.57% Santa Barbara City College 1,791 3.25% Santa Barbara Unified School District 1,350 1.57% Raytheon Electronic Systems 1,400 2.54% Sansum 1,289 1.50% Santa Barbara County Education Office 1,029 1.87% Raytheon 1,100 1.28% City of Santa Barbara 998 1.81%
Procore Technologies 900 1.05% Sansum Medical Foundation Clinic 960 1.74% Goleta Union School District 700 0.81% US Postal Service 736 1.34% Ten largest companies or organizations 20,391 23.74% 26,736 48.52% Sources:
(1) County of Santa Barbara, City of Santa Barbara, Pacific Coast Business Times As of June 30, 2022 As of June 30, 2013
Source Notes: In preparing the FY22 principal employers schedule, the number of employees at 6/30/22 was taken entirely from the "Top 25 Santa Barbara County Employers" schedule in the Pacific Coast Business Times "2022 Book of Lists". The FY13 data was not taken from the City's FY13ACFR. This is because we previously used the County's numbers for any employers that appeared on the City's schedule. Effective FY18, the County is now using data from the Pacific Coast Business Times and revised the historical data accordingly.

CITY OF SANTA BARBARA

FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION

LAST TEN FISCAL YEARS
(220)
Function 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Administration 101.9 101.8 105.6 106.5 106.5 108.3 111.3 103.0 106.0 110.3 Administrative services 25.5 25.5 28.5 30.5 30.5 30.5 31.5 28.0 29.0 32.0 City administrator 10.5 10.5 10.5 9.5 9.5 8.5 8.5 13.0 14.0 15.0 City attorney 11.4 11.3 11.6 11.0 11.0 13.8 15.8 15.0 16.0 16.8 Finance 46.5 46.5 47.0 47.5 47.5 47.5 47.5 39.0 39.0 38.5 Mayor and city council 8.0 8.0 8.0 8.0 8.0 8.0 8.0 8.0 8.0 8.0 Public safety 317.0 317.0 316.0 317.0 317.0 316.0 316.0 316.0 315.0 316.0 Police 207.0 207.0 211.0 212.0 212.0 211.0 210.0 210.0 209.0 210.0 Fire 110.0 110.0 105.0 105.0 105.0 105.0 106.0 106.0 106.0 106.0 Public works 138.0 139.0 144.0 143.0 140.0 141.0 143.0 142.0 142.0 146.8 Community services 115.2 116.7 122.4 126.5 131.6 132.8 125.5 123.0 124.0 129.8 Library 34.6 36.1 36.1 36.1 38.4 40.4 35.0 34.0 35.0 39.0 Parks and recreation 80.6 80.6 86.3 90.4 93.3 92.5 90.5 89.0 89.0 90.8 Community development 74.0 64.8 67.8 70.8 73.8 72.8 75.3 76.0 78.0 81.0 Water 68.3 67.3 68.8 74.3 75.3 72.8 72.8 70.5 71.5 71.0 Wastewater 49.0 49.0 49.0 49.0 49.0 52.5 52.5 56.5 56.5 57.0 Sustainability and resilience (2) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 14.0 15.0 17.0 Airport 54.0 52.0 55.5 55.5 55.8 61.0 63.0 66.0 67.0 71.0 Waterfront 46.0 46.0 46.0 46.0 47.0 47.0 47.0 48.0 48.0 48.0 Parking and transportation 34.4 34.4 30.4 31.4 31.4 30.4 30.4 27.0 27.0 30.4 Golf (1) 12.8 10.3 10.3 9.8 0.0 0.0 0.0 0.0 0.0 0.0
Total 1,010.6 998.3 1,015.7 1,029.7 1,027.3 1,034.5 1,036.7 1,042.0 1,050.0 1,078.2 Note:

Source: City's Human Resources Department
Note:
(1) Effective July 1, 2016 operation of the golf course was contracted to a private management company.

Consequently, there were no golf employees at June 30, 2016 (2) Sustainability and resilience started in FY20
Full-time Equivalent Employees as of June 30

CITY OF SANTA BARBARA

OPERATING INDICATORS BY FUNCTION

LAST TEN FISCAL YEARS
(221)
Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Year Year Year Year Year Year Year Year Year Year
Function 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Police
Criminal citations issued 3,172 4,282 5,298 3,511 1,087 932 815 665 485 687 Parking citations 46,450 55,555 55,700 55,716 59,580 59,613 72,038 49,439 55,439 51,554 Street sweeping citations 25,612 26,187 27,109 29,031 27,032 26,349 26,922 19,514 21,675 25,925 Fire
Number of calls received 8,038 8,165 8,341 9,102 9,891 9,240 10,583 7,312 9,198 11,292 Engine company fire inspections 2,773 2,661 3,116 2,890 2,450 2,329 2,034 924 - 564.00 Public works
Street resurfacing (Blocks) 26.2 32 23.7 14.2 8.4 11.3 36.0 54.0 31.0 0.0 Community services
Library items checked out 826,627 853,177 782,860 825,731 792,767 826,420 957,879 749,877 565,258 697,963 Community development
Building inspections completed 10,665 11,220 11,650 11,403 11,805 13,128 11,690 13,252 12,091 13,838 Total permits issued 2,373 2,412 2,580 2,818 2,571 2,777 2,741 2,438 2,388 2,273 Water
Million gallons water treated 7,481 7,527 4,960 4,247 4,132 4,600 4,016 4,382 5,558 2,687 Percent of drinking water regulations met 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% Wastewater
Million gallons waste water treated 2,627 2,551 2,360 2,301 2,312 2,252 2,369 2,202 2,088 2,137 Miles of wastewater collection system pipes cleaned 217 230 219 262 219 277 346 280 275 330 Percent of discharge requirements met 100.0% 100.0% 100.0% 100% 100% 100% 100% 100% 100% 100% Airport
Total number of annual passengers 722,041 699,916 628,837 630,612 690,992 738,079 860,909 796,908 426,836 1,122,129 Annual tons of airfreight 1,813 1,764 1,800 1,794 1,736 1,943 1,838 1,675 1,758 1,607 Waterfront
Number of lease contracts managed 65 65 64 64 65 60 60 61 61 62 Number of parking permits distributed 564,294 702,622 814,800 765,471 781,419 727,345 736,660 609,178 754,696 840,583 Parking
Vehicles parked in city lots 4,324,000 4,430,000 4,488,773 4,433,780 4,358,066 4,128,353 4,118,116 2,797,736 1,672,513 2,076,236 Golf course
Paid rounds of golf 61,558 62,512 57,089 55,376 53,799 54,300 52,222 54,465 76,393 72,248 Source: Various City Departments
(All the information was found thru the P3 reports found on the Access P3 Database)

CITY OF SANTA BARBARA

CAPITAL ASSET STATISTICS BY FUNCTION

LAST TEN FISCAL YEARS
(222)
Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Year Year Year Year Year Year Year Year Year Year
Function 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Police
Stations 1 1 1 1 1 1 1 1 1 1
Fire
Stations 8 8 8 8 8 8 8 8 8 8
Public works
Streets (miles) 238 254 254 255 255 255 254 254 254 254 Streetlights
Concrete installed-sidewalk, curb and gutter (sq ft.) 16,088 10,754 12,140 14,145 15,976 15,387 83,698 28,242 21,481 54,837 Community services
Parks acreage 1,765 1,765 1,765 1,765 1,808 1,808 1,810 1,815 1,815 1,815 Parks and sports facilities 54 56 57 57 60 60 60 60 60 60 Swimming pools 2 2 2 2 2 2 2 2 2 2
Tennis and pickle ball courts 34 34 34 34 33 33 33 33 33 33 Community buildings 12 15 15 15 16 16 16 16 16 16
Libraries 2 2 2 2 2 2 2 2 3 3
Number of volumes (books, periodicals, tapes, etc.) 319,898 330,703 330,773 439,773 396,055 564,103 506,195 521,414 454,560 436,554 munity development
Water
Number of distribution system reservoirs 15 15 15 15 15 15 15 15 15 15 Number of water supply reservoirs 1 1 1 1 1 1 1 2 2 3
Number of pump stations 14 14 14 14 14 14 14 15 17 17
Number of treatment plants 2 2 2 2 3 3 3 3 3 3
Number of wells 9 9 9 8 9 10 10 9 9 9
Wastewater
Number of treatment plants 1 1 1 1 1 1 1 1 1 1
Number of lift stations 9 9 9 7 7 7 7 7 7 7
Airport
Runways and Taxiways, paved surface (sq. footage) 6,842,079 6,842,079 6,842,079 6,842,079 6,842,079 6,842,079 6,842,079 6,943,779 6,784,710 6,784,710 Waterfront
Number of harbor slips 1,139 1,139 1,139 1,139 1,143 1,141 1,143 1,143 1,143 1,143 Parking
Number of parking structures and lots 15 15 16 16 15 15 15 15 15 15 Number of parking spaces 3,620 3,548 3,628 3,628 3,605 3,605 3,605 3,605 3,605 3,605 (223)

COMPLIANCE AND INTERNAL CONTROL SECTION
(224)
CLA (CliftonLarsonAllen LLP) is an independent network member of CLA Global. See CLAglobal.com/disclaimer.

CliftonLarsonAllen LLP
CLAconnect.com
(225)
INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL

STATEMENTS PERFORMED IN ACCORDANCE WITH
The Honorable City Council
Of the City of City of Santa Barbara
Santa Barbara, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of City of Santa Barbara, California (the City) as of and for the year ended June 30, 2022, and the related notes to the financial statements, which collectively comprise The City’s basic financial statements, and have issued our report thereon dated March 1, 2023.

Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

The Honorable City Council
Of the City of Santa Barbara
(226)
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

CliftonLarsonAllen LLP
Irvine, California
March 1, 2023

CITY OF SANTA BARBARA

COUNCIL AGENDA REPORT
AGENDA DATE: March 14, 2023
TO: Mayor and Councilmembers
FROM: Facilities Division, Airport Department
SUBJECT: Approval of Purchase Order to John Bean Technologies (JBT) Jetway Systems to Provide Passenger Boarding Bridge Parts and Equipment RECOMMENDATION:

That Council find it in the City's best interest to waive the formal bid process, as authorized by Municipal Code Section 4.52.060, and authorize the City General Services Manager to issue a Purchase Order to John Bean Technologies (JBT) Jetway Systems for providing parts and equipment for the passenger boarding bridges at Santa Barbara Airport in an amount of $80,000.

DISCUSSION:

The John (Jack) T. Ricard Airline Terminal was opened in June 2011 with three glass passenger boarding bridges (PBBs). An identical fourth bridge was installed at Gate 3 in 2019. These PBBs have an estimated 30 year life as long as they are maintained per the manufacturer’s recommendations.

JBT Jetway Systems is the sole manufacturer of the Airport’s PBBs and they are the only source for parts. Consistent with the recommendation in the manufacturer’s manual for the PBBs, replacement parts have been ordered exclusively from JBT Jetway Systems for the duration of their operation.

Due to supply chain shortages, the Facilities Division is making an effort to stock more parts and material on-site. This will reduce downtime and improve efficiency of operations. In order to do this, purchases exceeding usual equipment replacement are necessary. Following this increase in on-site inventory, purchasing of equipment will replace units in storage rather than placed immediately into service.

Agenda Item No. 11
File Code No. 560.04
Council Agenda Report
Approval of Purchase Order to John Bean Technologies (JBT) Jetway Systems to Provide Passenger Boarding Bridge Parts and Equipment
March 14, 2023