Solana Beach City Council
February 9, 2022

construction shall be in accordance with Chapter 15.40 of the Solana Beach Municipal Code.
(2) A soils report shall be prepared by a registered soil engineer and approved by the City Engineer. All necessary measures shall be taken and implemented to assure slope stability, erosion control and soil integrity. The grading plan shall incorporate all recommendations contained in the soils report.
(3) The Structural setback zone, shown on the exhibit included in the "Updated Slope Stability Analysis, Solana Highlands, Solana Beach, California, by Geocon, Inc., dated August 16, 2018, Revised August 28, 2018" should be incorporated into the grading plan. No habitable structures allowed in this zone.
(4) All drainage should be directed away from the top of the existing and proposed cut slopes between the proposed development and existing properties.
(5) All recommendations of the Hydrology Report (such as on site detention basins), prepared by Pasco Laret Suiter & Associates, shall be incorporated into the Grading Plan and approved by the City Engineer.
(6) A storm water detention easement or maintenance agreement shall be recorded for maintenance of the detention basin by the property owner in perpetuity, prior to the occupancy of the first building on this project.
(7) All retaining walls and drainage structures shall be shown on the grading plans. Retaining walls shown on the grading plan shall conform to the San Diego Regional Standards or be designed by a licensed civil engineer. Engineering calculations for all designed walls with a surcharge and nonstandard walls shall be submitted at grading plan check. Retaining walls may not exceed the allowable height within the property line setback as determined by the City of Solana Beach Municipal Code or as shown on approved exhibits as part of this discretionary action.
(8) The applicant is responsible to protect the adjacent properties during construction. If any grading or other types of construction are anticipated beyond the property lines, the applicant shall obtain a written permission from the adjoining property owners for incidental grading or construction that may occur and submit the letter to the City Engineer prior to the anticipated work.

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17-14-29 DRP/SDP/VTPM/Affordable Housing Plan, H.G. Fenton

(9) Pay grading plan check fee in accordance with the current Engineering Fee Schedule at initial grading plan submittal.

Inspection fees shall be paid prior to issuance of the grading permit.
(10) Obtain and submit grading security in a form prescribed by the City Engineer.
(11) Obtain haul permit for import / export of soil. The applicant shall transport all excavated material to a legal disposal site. ( 12) Submit certification from the Engineer of Record and the Soils Engineer that all public or private drainage facilities and finished grades are functioning and installed in accordance with the approved plans. This shall be accomplished by the Engineer of record incorporating as-built conditions on the Mylar grading plans and obtaining signatures of the Engineer of Record and the Soil Engineer certifying the as-built conditions.
(13) An Erosion Control Plan shall be prepared. Best management practices shall be developed and implemented to manage storm water and non-storm water discharges from the site at all times during excavation and grading activities. Erosion prevention shall be emphasized as the most important measure for keeping sediment on site during excavation and grading activities.

Sediment controls shall be used as a supplement to erosion prevention for keeping sediment on site.
(14) Show all proposed on-site private drainage facilities intended to discharge water run-off. Elements of this design shall include a hydrologic and hydraulic analysis verifying the adequacy of the facilities and identify any easements or structures required to properly convey the drainage. The construction of drainage structures shall comply with the standards set forth by the San Diego Regional Standard Drawings.
(15) The Applicant shall submit a storm water management plan to demonstrate to the satisfaction of the City Engineer that the project does not increase storm water runoff or peak discharge from the existing condition, and that the requirements of SBMC 13.10 Storm Water Management and the RWQCB Final Order R9-2013-0001 are met.
(16} No increased cross lot drainage shall be allowed.
(17) Submit certification from a registered civil engineer and soil engineering that all public or private drainage facilities and finished Resolution 2018-132
17-14-29 DRP/SDP/VTPM/Affordable Housing Plan, H.G. Fenton

grades are functioning and installed in accordance with the approved plans. This shall be accomplished by engineer of record incorporating as-built conditions on the Mylar grading plans and obtaining signatures of the engineer of record and soil engineer certifying the as-built conditions.
( 18) All construction demolition materials shall be recycled according to the City's Construction and Demolition recycling program and an approved waste management plan shall be submitted.
(19) The applicant shall enter into an Encroachment, Removal, and Liability Agreement for any proposed private work in the Public right of way; including but not limited to grading, landscaping, installation of irrigation system, etc.
(20) Slopes adjacent to site boundaries shall be set back in accordance with SBMC 15.40.140.

II. PUBLIC IMPROVEMENTS/TRAFFIC CALMING PLAN
The following engineering conditions (1 thru 13 under Public Improvements) are required to improve the existing roadway network adjacent to and in general vicinity of the proposed project boundary consistent with the City's circulation element and implementing certain recommendations of the City's Comprehensive Active Transportation Strategies (CATS} Program in satisfaction of the Traffic Impact Fee (Tl F) requirement. The Applicant shall construct and install the improvements set forth on the Off-Site Improvement Plan dated December 3, 2018 (the "Off-Site Improvement Plan") submitted by the Applicant to the City concerning the Development Review Permit for the Project. The Applicant shall obtain an Engineering permit for construction of public improvements to the satisfaction of the City Engineer as follows:
( 1) The applicant shall be responsible for enhancement to the operation of Turfwood driveway access at Valley Avenue. These Enhancements may include but not be limited to:
(a) Modification of the traffic signal timing at the intersection of Valley Avenue and Stevens Avenue to provide for a more efficient egress at the Turfwood Lane access. The proposed signal timing enhancement may include construction of additional loop detectors on northbound Valley Avenue and associated
communication and control equipment in the cabinet at a cost not to exceed $50,000.
(b) Striping the Turfwood driveway for a distance of approximately 50 feet from Valley Avenue to accommodate one inbound lane, Resolution 2018-132
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one outbound left turn lane, and one outbound right turn lane.

Additionally, the applicant shall install "Keep Clear" legend on Valley Avenue at Turfwood driveway.
(c) Working with the City Engineer and the adjacent property owner to improve the sight visibility line for vehicles exiting Turfwood Lane. lf the adjacent property owner is uncooperative, the applicant is not obligated to provide any improvements outside of the existing right of way.
(d) Installation of a "Solar Powered Electronic Speed Sign" on Southbound Stevens Avenue or other means to calm traffic approaching Turfwood driveway access.
(2) Applicant shall modify the Traffic signal at Nardo Avenue and Stevens Avenue to install a signal indicator for traffic calming purposes to emphasize a safe right turn on red from eastbound Nardo to southbound Stevens Avenue at a cost not to exceed $50,000.
(3) On west side of Valley Avenue, south of Nardo Avenue provide appropriate regulatory signs to prohibit left turn out of the proposed driveway for the senior housing complex.
(4) On south Nardo Avenue west of Stevens Avenue install a raised concrete median and corresponding signage, striping, and pavement legends to channelize traffic. This may require elimination of on-street parking along South Nardo on both sideS of the street.
(5) On northwest, southwest, and northeast corner of South Nardo Avenue and Fresca Street, install concrete curb extensions. This will require elimination of two (2) on-street parking spaces along south side of Nardo Avenue. The proposed curb extensions shall be designed to accommodate ADA compatible pedestrian ramps on both sides of Nardo Avenue. The applicant shall also install thermoplastic continental crosswalk for pedestrian crossing at the stop-controlled north leg of South Nardo Avenue/Fresca Street and a solar powered pedestrian crossing flashing sign with
corresponding signage.
(6) On Nardo Avenue install raised concrete chokers with sufficient lengths and widths. The applicant shall enter into an
Encroachment Maintenance and Removal Agreement (EMRA) for maintenance of any landscaping and irrigation system in these features. Additionally the applicant shall install two "Solar Powered Electronic Speed Signs" within this segment of Nardo Avenue.

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(7) On South Nardo Avenue between East Solana Circle and Nardito Lane install a speed table (a long, flat speed bump), a thermoplastic continental crosswalk for pedestrian crossing and a solar powered pedestrian flashing sign with corresponding signage and striping.
(8) On South Nardo between Fresca Street and Nardito Lane, evaluate additional speed hump with the City Engineer, and install if safety standards can be achieved.
(9) On both sides of South Nardo between Solana Circle and Stevens Avenue install Sharrow marking pavement legends.
(1 O) Construct all sewer lateral connections to the City sewer main consistent with City Standards.
(11) Construct all proposed driveway entrances to the project on South Nardo Avenue and Valley Avenue consistent with City Standards. (12) Construct all storm drain connections to the City curb or storm drain system consistent with City Standards.
(13) The existing sewer main serving this property, proposed to be replaced, shall be abandoned in the public right-of-way by plugging the street manhole connection and plugging the pipe at the rightof-way line. The sewer connection(s) for 821 Stevens Avenue shall be capped at the main.
(14) Connect to the existing recycled waterline on Stevens Avenue. The applicant shall coordinate with Santa Fe Irrigation District, San Elijo Joint Powers Authority and County Health Department for this extension project. All irrigation system including the ones in the public right of way shall be provided by recycled water. (15) The Applicant shall continue to work with City Staff to develop the Traffic Calming Plan referenced herein. Upon completion, the Traffic Calming Plan shall be subject to future consideration and approval by the City Council.

Ill. SEWER FEES
The Applicant shall pay in full, at occupancy, unless waived by the City as part of the approved fee waiver, the one-time sewer
capacity/connection fees of $4,500.00 per Equivalent Dwelling Unit (EDU). The EDU assignment is per SBMC 14.08.060.

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17-14-29 DRP/SDPNTPM/Affordable Housing Plan, H.G. Fenton

(1) Pay in full, at occupancy the prorated portion of the current annual sewer charge for the remainder of the fiscal year. For FY 2018/19 the annual fee is $665.67 per EDU. This condition shall be phased based on the prorated number of units in each phase
(2) The applicant shall be entitled to credit all existing Sewer Capacity in use by the project and is required to pay fees only on net additional Equivalent Dwelling Units (EDU's) as proposed by this project.

IV. VESTING TENTATIVE PARCEL MAP
(1) A Parcel Map shall be prepared and recorded in accordance with Chapter 16.32 of SBMC Prior to obtaining a building permit or grading permit.
(2) Provide a Subdivision Map Guarantee within ten days before recording the Vesting Parcel Map.
(3) Pay Parcel Map plan check fee in accordance with the current Engineering Fee Schedule.
(4) The applicant shall comply with Section 66436 of the Government Code by furnishing to the City Engineer a certification from each public utility and each public entity owning easements within the proposed subdivision stating that: (a) they have received from the developer a copy of the proposed Parcel Map; (b) they object or do not object to the filing of the Parcel Map without their signature; (c) in the case of a street dedication affected by their existing easement, they will sign a "subordination certificate" or "joint use certificate" on the map when required by the governing body. (5) Existing lot lines as shown on Vesting Tentative Parcel Map (VTPM) shall be consistent with the DRP plans for the Project. If approved by the City Council, the Applicant shall prepare and record, to the satisfaction of the City Engineer, a Vesting Parcel Map or compatible document prior to issuance of the first building permit.
(6) All easements, private and public utility easements, including but not limited to SDG&E, water, sewer, and storm drain shall be properly abandoned and when needed exchanged to the
satisfaction of the City Engineer prior to the issuance of the first building permit.
(7) According to sheet G.1.1 of the DRP exhibit, there is an access easements providing legal access to adjacent properties.

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Appropriate arrangements are be made to replace the access easement to the existing legal parcels.
(8) Concurrently with the recordation of the Parcel Map, an amendment to that Grant of Open Space Easement recorded July 6, 1970 as Document No. 118110 in the Official Records of San Diego County shall be recorded in a form approved by the City Attorney consistent with the approved plans for the project. (9) Prior to the recordation of the Parcel Map, or issuance of any building permit, whichever occurs first, the Affordable Housing Agreement shall be executed and recorded against the entire property.
(10) Prior to recordation of the Parcel Map a resolution summarily vacating the existing public sewer easement shall be recorded.

V. CONDITIONS PRIOR TO OCCUPANCY SHALL INCLUDE, BUT NOT BE LIMITED TO THE FOLLOWING:
(1) Underground all new utility services, including but not limited to electrical and telephone.
(2) Complete to the satisfaction of the City Engineer all grading, paving, public improvements, landscaping, and drainage
improvements. With the approval of this application, the City Manager is authorized to allow interim occupancy for a portion of the project subject to acceptance of all required public and private improvements for the said portion of development and assurance for construction of the remainder of improvements to the satisfaction of the City Engineer.
(3) The Applicant shall pay all Development Impact Fees levied at the time of project approval. Development Impact Fees shall be based on the net increase of 62 units, unless otherwise provided.

6. ENFORCEMENT: Pursuant to SBMC 17.72.120(8) failure to satisfy any and all of the above-mentioned conditions of approval is subject to the imposition of penalties as set forth in SBMC Chapters 1.16 and 1.18 in addition to any applicable revocation proceedings. The conditions of approval for the project shall remain in place until such time they may be amended or superseded by subsequent City Council action.

7. EXPIRATION: The vesting tentative map shall expire 24 months after the date of Coastal Commission approval and may be extended as provided by State law or Section 16.12.110, whichever provides the longest extension. All other approvals granted by this resolution shall expire 60 months after the date of Coastal Commission approval and may be extended as provided by Section 17.72.1 1 0.

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8. INDEMNIFICATION AGREEMENT: The Applicant shall defend, indemnify, and hold harmless the City, its agents, officers, and employees from any and all claims, actions, proceedings, damages, judgments, or costs, including attorney's fees, against the City or its agents, officers, or employees, relating to the issuance of this permit including, but not limited to, any action to attack, set aside, void, challenge, or annul this development approval and any environmental document or decision. The City will promptly notify the Applicant of any claim, action, or proceeding. The City may elect to conduct its own defense, participate in its own defense, or obtain independent legal counsel in defense of any claim related to this indemnification. ln the event of such election, Applicant shall pay all of the costs related thereto, including without limitation reasonable attorney's fees and costs. In the event of a disagreement between the City and the Applicant regarding litigation issues, the City shall have the authority to control the litigation and make litigation related decisions, including, but not limited to, settlement or other disposition of the matter. However, the Applicant shall not be required to pay or perform any settlement unless such settlement is approved by Applicant.

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17-14-29 DRP!SDP/VTPM/Affordable Housing Plan, H.G. Fenton

9. NOTICE TO APPLICANT: Developer is hereby notified, as required by Government Code Section 66020, that the approved plans and the conditions of approval and ordinances governing tees and exactions in effect at the time the project is approved constitute written notice of the description of the dedications, reservations, amount of fees and other exactions related to the project. As of the date of project approval, the 90 day period has begun in which developer may protest any dedications, reservations, fees or other exactions imposed by the City.

To protest the imposition of any fee, dedications, reservations or other exactions described in this resolution you must comply with the provisions of Government Code Section 66020. Failure to file a protest in compliance with all of the requirements of Government Code Section 66020 will result in a legal bar to challenging the dedications, reservations, fees or other exactions.

PASSED AND ADOPTED at a special meeting of the City Council of the City of Solana Beach, California, held on the 17th day of December 2018, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

Councilmembers - Zito, Edson, Hegenauer, Heebner
Councilmembers - None
Councilmembers - Zahn
Councilmembers - None
DAVID A. ZITO, Mayor
APPROVED AS TO FORM: ATTEST:

JOHA
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RESOLUTION CERTIFICATION
STATE OF CALIFORNIA }
COUNTY OF SAN D IEGO §

CITY OF S OLANA BEACH
I, ANGELA IVEY, City Clerk of the City of Solana Beach, California, DO HEREBY CERTIFY that the foregoing is a full, true and correct copy of Resolution 2018-132 approving a Development Review Permit, Structure Development Permit, Vesting Tentative Parcel Map, Affordable Housing Plan, Density Bonus with Development Standards Waiver, and Fee Waiver for the Solana Highlands Residential Community and Affordable Senior Housing Project at 661-781 South Nardo Dr. and 821 Stevens Ave., Case No.: 17-14-29, Applicant: HG. Fenton as duly passed and adopted at a Special Solana Beach City Council meeting held on the 17th day of December, 2018. The original is on file in the City Clerk's Office.

ANGELA IVEY CITY CLERK ! ',...,
CERTIFICATION DATE: ~~~. 201"8
ATTACHMENT 2
ATTACHMENT 2
Link to this document
https://www.dropbox.com/sh/cv5stwha3rmc87v/AAC_TmgEOk3vR5Dx MpPyNhXea?dl=0
RESOLUTION 2022-006

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SOLANA

BEACH, CALIFORNIA, CONDITIONALLY APPROVING A

DEVELOPMENT REVIEW PERMIT MODIFICATION AND

STRUCTURE DEVELOPMENT PERMIT WAIVER FOR THE

PREVIOUSLY APPROVED SOLANA HIGHLANDS RESIDENTIAL

COMMUNITY AND AFFORDABLE SENIOR HOUSING PROJECT AT
661-781 SOUTH NARDO AVENUE AND 821 STEVENS AVENUE.

APPLICANT: H.G. Fenton
CASE NO.: DRP Mod 2020-002
WHEREAS, H.G. Fenton (hereinafter referred to as “Applicant”) submitted an application for a Development Review Permit (DRP), Structure Development Permit (SDP), Affordable Housing Plan, Density Bonus with Development Standards Waiver, and Fee Waiver subject to Title 17 (Zoning), of the Solana Beach Municipal Code (SBMC); and
WHEREAS, the Applicant also requested approval of a Vesting Tentative Parcel Map (VTPM) which would modify the property from three lots to two lots; and WHEREAS, at the duly and properly noticed public hearing held on December 5, 2018, and the continued public hearing held on December 17, 2018, the City Council received and considered evidence concerning the proposed application as revised; and WHEREAS, the public hearings were conducted pursuant to the provisions of Solana Beach Municipal Code Section 17.72.030; and
WHEREAS, the City Council of the City of Solana Beach certified the Final Environmental Impact Report (FEIR), and adopted a Mitigation Monitoring and Reporting Program (MMRP) and Findings of Fact for the Solana Highlands project in accordance with the California Environmental Quality Act and the State CEQA Guidelines via Resolution 2018-131; and
WHEREAS, the Solana Beach City Council approved a Development Review Permit (DRP), Structure Development Permit (SDP), and Vesting Tentative Parcel Map (VTPM) and all related entitlements to construct the Solana Highlands Revitalization Project (the “Project”) under Resolution 2018-132; and
WHEREAS, following City Council approval in 2018, the Applicant obtained California Coastal Commission approval of Coastal Development Permit # 06-19-0109 in May 2019; and
WHEREAS, following Coastal Commission approval, the Applicant initiated preparation of construction and engineering plans and submitted applications for ministerial building permits to the City in December 2019 for certain building, grading and public improvement elements of the project; and
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2020-002 Solana Highlands DRP Modification and SDP Waiver H.G. Fenton

WHEREAS, City Staff and the Applicant coordinated on the permit processing effort to discuss and review comments on the project plans intermittently throughout 2020 until processing efforts were slowed / hampered by COVID-19-related restrictions and protocols and related staff work modifications; and
WHEREAS, during 2020 and continuing until the present time, input from the community was solicited by the Applicant on several key project-related topics including landscaping, traffic calming measures and Applicant-initiated revisions to Buildings 13, 19 (Clubhouse) and 24; and
WHEREAS, in April 2021, the Applicant submitted a formal application to modify discrete elements of the previously approved project (DRP/SDP 17-14-29) to approved/proposed Buildings 13, 19 (Clubhouse), and 24 and to finalize the project landscape plan, traffic calming plan, and to request additional time to complete the onsite parking management plan; and
WHEREAS, the Applicant has stated that their intent with the project modifications is to ensure that each element remains consistent with the goals and intent of City Councilimposed Conditions of Approval contained in Resolution 2018-132; and WHEREAS, the Applicant requests consideration of a modification of the City Council Condition of Approval requiring that Building 13 be lowered by six (6) inches from the revised story pole plan elevation submitted October 2, 2018, limiting the maximum elevation of building 13 to 134.9 MSL. The Applicant requests the condition be revised to lower the maximum building height of the easterly 47 feet of Building 13 by an additional

3.0 feet (to 131.9 MSL) and allow the remaining westerly approximately 144’ feet of Building 13 to be constructed to the height of 139.9’ MSL as originally depicted and certified by story pole certification dated 6/14/18 and waive the story pole requirement for this modification as no new view impairment would occur; and WHEREAS, the Applicant requests consideration of a modification to Building 19 (Clubhouse) on three sides to allow a second-floor balcony, open on three sides with a roof, and an exterior staircase, which would project outside of the previously permitted horizontal envelope and waive the story pole requirement for these modifications as no new view impairments would occur; and
WHEREAS, the Applicant requests consideration of a modification to the site plan to shift Building 24 approximately 60’ feet east and waive the story pole requirement for this modification as no new view impairment would occur; and WHEREAS, the Applicant requests consideration of a modification to City Council Condition of Approval requiring submittal of an onsite Parking Plan to the City Manager on or before March 1, 2020 to allow additional time to develop the parking plan. The Applicant requests they be allowed to submit the onsite Parking Management Plan to the City Manager on or before September 1, 2023; and
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2020-002 Solana Highlands DRP Modification and SDP Waiver H.G. Fenton

WHEREAS, the Applicant requests consideration of refinements to the originally approved traffic calming plan reflecting an iterative review process with the community and the input of the City Engineer and the Solana Beach Fire Department; and WHEREAS, the Applicant requests consideration of a modification of a portion of City Council Condition of Approval XXVI requiring separate City Council approval of a Final “Conceptual” Landscape Plan. The Applicant requests that a Final Landscape Plan be reviewed and approved by the City Council essentially skipping an interim approval of a Final “Conceptual” Landscape Plan. The Applicant also requests that the requirement for 10, 84-inch box trees be removed from project requirements; and.

WHEREAS, at the duly and properly noticed public hearing held on February 9, 2022 the City Council received and considered evidence concerning the proposed project modifications; and
WHEREAS, the public hearing was conducted pursuant to the provisions of Solana Beach Municipal Code Section 17.72.030; and
WHEREAS, this decision is based upon the oral and written evidence presented at the hearing, and any information the City Council gathered by viewing the site and the area as disclosed at the hearing.

NOW THEREFORE, the City Council of the City of Solana Beach, California, does resolve as follows:

1. That the foregoing recitations are true and correct.

2. That an Environmental Impact Report (EIR) was prepared for this Project in conformance with the California Environmental Quality Act of 1970 (CEQA). The EIR was prepared as a Project EIR pursuant to Section 15161 of the State CEQA Guidelines. The FEIR was contained in two volumes and consists of the following parts plus the Findings of Fact approved by the City Council under Resolution 2018-131 on December 17, 2021. Following project approval by the City Council, a Notice of Determination (Section 15375) was filed by the City with the San Diego County Clerk.

The proposed modifications to the project do not raise any new environmental issues or increase the level of impact previously disclosed in the Final EIR Certified by the City Council in December 2018 under Resolution 2018-131.

Therefore, no new or subsequent environmental review is required due to the scope and nature of the modifications as proposed, pursuant to the State CEQA Guidelines Section 15162.

3. That the Applicant request for a DRP Modification and SDP Waiver for the above described modifications to the approved Solana Highlands residential development consisting of 260 residences (including 32 affordable senior units) consisting of studios, one and two bedrooms, 10,287 square feet of clubhouse/leasing office space, 247,583 square feet of landscaped area, 716 Resolution 2022-006
2020-002 Solana Highlands DRP Modification and SDP Waiver H.G. Fenton

trees, 65,434 square feet of open space, 525 on-site parking spaces including 233 garages, 22 covered spaces and 270 open/guest spaces, is conditionally approved based upon the following Findings and subject to the following Conditions:

4. FINDINGS
Based on the totality of the record, the City Council makes the following findings:

A. In accordance with Section 17.68.040 (Development Review Permit) of the City of Solana Beach Municipal Code, the City Council finds the following:

I. The proposed project is consistent with the General Plan and all applicable requirements of SBMC Title 17 (Zoning Ordinance), including special regulations, overlay zones and specific plans.

General Plan Consistency: The proposed project is consistent with the General Plan, which designates the property as High Density Residential (HR). Multi-family residential development under this category will range between 13 and 20 dwelling units per acre. Other compatible uses such as accessory dwelling units, home occupations, religious institutions, educational institutions, parks and recreation facilities, and public utilities are permitted or conditionally permitted.

Assuming maximum development and an average household size of

2.4 persons per unit, population densities in these areas could be as high as approximately 48 persons per acre. Most of Solana Beach’s high density residential development is located in the southwestern portion of the city (i.e., along the coastal bluffs south of the Plaza and in the area generally bounded by Via de la Valle, Solana Circle, Nardo Avenue, and Stevens Avenue). The project is proposing 260 residential units or 19.4 dwelling units per acre. The proposed Project may be found consistent with the General Plan, which designates the property as High Density Residential (HR) and may be found to be consistent with the following General Plan policies in the City’s Land Use (LU) Element for residential land uses:

Policy LU-1.1: Encourage the development and protection of healthy residential neighborhoods by ensuring sensitive
transitions between those neighborhoods and
adjoining areas and preventing deterioration through
rehabilitation and maintenance efforts.

Project Consistency: The project has been subject to
a view assessment process to ensure sensitive
transitions between the project and adjacent
neighborhoods and has undergone substantial
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2020-002 Solana Highlands DRP Modification and SDP Waiver H.G. Fenton

changes, as described in the staff report, to create
appropriate transitions.

Policy LU-1.2: The City’s land use plan shall include residential land uses comprising a range of housing types, locations,
and densities.

Project Consistency: The City's general plan and
housing element include a range of housing types,
locations, and densities,
Policy LU-1.3: In order to protect the rental housing stock, protect purchasers of dwelling units, assure consistency with
the general plan density requirements, assure
adequate parking, and assure adequate public
facilities, conversion of existing apartments to
condominiums or other similar forms of subdivision
shall be regulated pursuant to City zoning and
subdivision ordinances. The regulations shall ensure
that conversion of apartments to condominiums or
other similar types of subdivisions will meet current
standards for the construction of new condominiums or
other similar types of multi-family dwellings within the city.

Project Consistency: No condominium conversion is
proposed as part of this project.

Policy LU-1.4: Pursue opportunities to improve and protect existing residential neighborhoods by enhancing the pedestrian
and bicycle experience, implementing traffic calming
measures where appropriate, and providing
convenient access to schools, parks, beaches, and
other amenities and services.

Project Consistency: As described in the staff report,
the project includes 50 bicycle parking spaces and will construct extensive traffic calming measures and
pedestrian safety measures on streets adjacent to the
project.

Policy LU-6.6: Promote infill development, redevelopment, rehabilitation, and reuse efforts that protect and
contribute positively to existing neighborhoods and
surrounding areas.

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Project Consistency: The project is located on an
existing developed infill site that will be reused and, through extensive landscaping and new construction;
contribute positively to the surrounding area.

Policy LU-6.7: Promote appropriate transitions in building height and bulk, which are sensitive to the visual and physical
character of adjacent neighborhoods.

Project Consistency: As described in the staff report,
the project has been subject to an extensive view
assessment process and has proposed major design
changes to ensure that it is sensitive to the visual and physical character of the adjacent neighborhoods.

The project is consistent with the following General Plan programs and goals in the City’s 6
th Cycle Housing Element, including regional
housing needs assessment / local share goals and affordable housing goals, including:
(1) Continuing to implement the density bonus and affordable housing ordinances.
(2) Addressing and mitigating constraints to housing development by approving development standards and waivers needed for project construction and a fee waiver.
(3) Providing 32 affordable housing units for the elderly (seniors) as an identified “Special Needs Group” in the Housing Element. The continued affordability of these units will be ensured for 55 years, and that the rents be limited to those affordable to low income households.
(4) Meeting the local share of the Regional Housing Needs Assessment (RHNA) as established by SANDAG by providing a portion of the lower income units that are the City’s share of the regional housing need.
(5) Developing a site with the 260 units that were identified as the site’s potential in the City's Housing Element.
(6) Redeveloping an older apartment complex to preserve neighborhood quality.

The proposed project is also consistent with the requirements of Title 17 in that the proposed project density of 260 units is permitted with a density bonus. As designed the project meets the minimum lot area of Resolution 2022-006
2020-002 Solana Highlands DRP Modification and SDP Waiver H.G. Fenton

10,000 square feet in that each lot will be 1.25 acres and 11.64 acres in size, respectively. The proposed buildings will have a minimum front yard setback of 25 feet, side yard setback of 10 feet and rear yard setback of 25 feet as required in the HR zone. Per the City’s parking ordinance, the project requires 494 parking spaces. The applicant is consistent with the parking ordinance requirement by proposing 525 parking spaces on-site. The parking provided for the affordable senior units is consistent with Section 65915(p) of the Government Code and the City’s density bonus ordinance.

II. The proposed development complies with the following development review criteria set forth in Solana Beach Municipal Code Section

17.68.040.F:
(1) Relationship with Adjacent Land Uses: The development shall be designed in a manner compatible with and where feasible, complimentary to existing and potential development in the immediate vicinity of the project site. Site planning on the perimeter of the development shall give consideration to the protection of surrounding areas from potential adverse effects, as well as protection of the property from adverse surrounding influences.

The subject lot is located within the High Residential Density (HR) Zone. According to SBMC 17.20.010 this zone allows 13 to 20 dwelling units/net acre and is intended for multiple-family attached units such as apartments and condominium buildings. Such areas are located in close proximity to major community facilities, commercial centers and transportation routes. It is intended that development in this zone utilize innovative site planning, and provide on-site recreational amenities.

No significant adverse effects upon neighboring properties have been identified or are anticipated to occur from the project implementation, and the project has been extensively redesigned to protect view impacts. As conditioned, the proposed project gives consideration to the protection of surrounding areas from potential adverse effects and provides protection of the property from adverse surrounding influences. Additionally, the City Council has certified the FEIR for this project and has found that project impacts either will not occur, will be less than significant, or will be less than significant with mitigation in all the topic areas analyzed. (2) Building and Structure Placement: Buildings and structures shall be sited and designed in a manner which visually and functionally enhances their intended use.

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The Project includes a total of 24 buildings including one affordable senior housing building (Building 25) and one clubhouse/leasing center (Building 19). All parking would be provided onsite in either the form of a garage or surface parking including covered and uncovered and includes 233 garages, 22 covered spaces and 270 open/guest spaces.

Fifteen of the 24 buildings would be two stories in height and nine of the Buildings would be three stories in height. In general, the buildings located along South Nardo Avenue would be two stories and the buildings that are internal to the site would be three stories. The affordable senior building would also be three stories and is located at the southeast corner of the site.

The project includes a total of 260 units with a breakdown as follows:
(a) 12 studio apartments that are 420 square feet in size (b) 128 one-bedroom apartments ranging in size from 517 to 954 square feet
(c) 120 two-bedroom apartments ranging in size from 731 to 1,212 square feet.

Each unit proposes private open space in the form of patios for the units on the ground floor and balconies for the units on the second floor.

Project amenities on site would include a recreation
facility/clubhouse building and associated recreation facilities such as a pool, spa, barbecue areas, walking paths, and passive usable open space. Additionally, the project would include a small private park along South Nardo Avenue to reduce effects to public and private views in proximity to the existing greenspace on site.

The SBMC includes development standards for high density residential development based on the zone in which the project is located, including required setbacks, maximum FAR, and building height. The proposed Project meets or exceeds all required setbacks, and is below the maximum allowable FAR.

Required parking and landscaping standards are contained in the City’s Off Street Parking Design Manual (OSPDM).

The highest point of the Project is 149.5 above Mean Sea Level (MSL), measured at Story Pole #39, with the Project 25 feet at that Resolution 2022-006
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location. The maximum height of the Project is 47.1’ above the lowest point of the existing/proposed grade at Story Pole #86 where the project site elevation is 116 feet above MSL at that location. As required by State law, the City will waive development standards for height of buildings, retaining walls, and walls and fences that would otherwise physically preclude development of the property with the permitted density bonus.
(3) Landscaping: The removal of significant native vegetation shall be minimized. Replacement vegetation and landscaping shall be compatible with the vegetation of the surrounding area. Trees and other large plantings shall not obstruct significant views when installed or at maturity.

Per SBMC 17.56.040, the proposed development is subject to the City’s Water Efficient Landscape Regulations. The existing site contains developed areas and vegetation consisting of both native trees and non-native ornamental trees, shrubs and other plant species.

The final landscaping plan for the Project proposes 247,583 square feet of landscaped area which is equal to approximately 43% of the project site. During construction of the proposed Project, it is anticipated that all of the existing trees, shrubs and other vegetation would be removed as part of the proposed Project due to the extent of grading that is proposed on site to lower pad elevations.

The Project has been conditioned to comply with the LCP LUP Policy 3.53 regarding mitigation for native tree species removed from a project site. The inclusion of five (5) California Sycamores would replace the existing mature 5 California Sycamores on site is in accordance with City LCP requirements for native tree mitigation. The proposed changes to the buffer landscaping are in response to concerns raised by adjacent residents expressing concerns regarding the viability of transplanted 84-inch box trees and potential impact on hillside / slope stability as well as smaller size container trees ability to grow faster after transplantation.

In lieu of ten 84-inch Coast Live Oaks along the southern edge of the project site, the planting plan includes twenty 24-inch Coast Live Oaks in the East and North-East Zones. Along the southern project boundary, screening will be provided by 11 Coastal Shrub Oaks in 15-gallon containers that are more appropriate for slope planting. Other prominent screening trees in the South Zone include 15 Torrey Pines and various other tree species. More than Resolution 2022-006
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sixty 24-inch box trees will be located within the buffer zones in a combination of oak, palm and other native and drought tolerant tree species selected with the benefit of community input.

The Project would include the installation of mature (boxed) trees to reduce visual and aesthetic effects from the loss of the existing vegetation on site. Larger shade trees would include
approximately 716 trees in total including 15-gallon trees and 24- inch box trees
The landscape plan includes the use of native species and/or drought-tolerant plant material. No invasive or potentially invasive species would be used. Planting is intended to be a connecting device linking the various pieces of the project site and design styles. The landscape plan uses plant material to help define spaces, create/encourage circulation paths, emphasize entry points, and provide softness and scale to the architecture.

Evergreen, deciduous, and flowering material are proposed throughout the site and mature native trees are proposed. New landscaping would use significantly less water than the current landscaping, as the proposed project would use reclaimed water for all landscape uses and would also comply with all California landscape water-usage standards.

The Applicant’s final landscape plan has been reviewed by the City’s third-party landscape architect who has recommended approval of the landscape plan. The Applicant would be required to submit detailed construction landscape drawings that would be reviewed by the City’s third-party landscape architect for conformance with the final plan. Additional Conditions of Approval have been added to ensure that the Final Landscape Plan is reviewed and approved by the Santa Fe Irrigation District/San Elijo Joint Powers Authority (JPA) and the County of San Diego Department of Environmental Health and include an engineering review by EsGil of Final Landscape Plan Construction Drawings Sheets LC-01 through LC-13. In addition, the City’s third-party landscape architect would perform inspections during the construction phase of the project. A separate condition requires that native or drought-tolerant and non-invasive plant materials and water-conserving irrigation systems are required to be incorporated into the landscaping to the extent feasible. (4) Roads, Pedestrian Walkways, Parking and Storage Areas: Any development involving more than one building or structure shall provide common access roads and pedestrian walkways. Parking and outside storage areas, where permitted, shall be screened Resolution 2022-006
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from view, to the extent feasible, by existing topography, by the placement of buildings and structures, or by landscaping and plantings.

Residential projects in the City are required to comply with parking standards in SBMC 17.52. The parking requirements for the affordable senior housing element are per the State bonus density code (CGC 65915(p)). Although this maximum required parking ratio could apply to the entire property, the Applicant is complying with SBMC Chapter 17.52 for the market-rate portion of the site (e.g., 228 units).

The proposed Project meets or exceeds the parking requirements for automobile and motorcycle parking as outlined in SBMC 17.52.

The proposed project includes 525 onsite parking spaces, 50 bicycle spaces, 17 motorcycle spaces and 9 accessible spaces.

Pedestrian paths are provided throughout the site to facilitate internal pedestrian circulation across and within the site.

Vehicular access to the site would be provided from two driveway locations on South Nardo Avenue. In addition, direct access to the affordable senior housing building would be provided from the existing curb cut serving the existing multi-family units off Stevens Avenue located south of the intersection of South Nardo Avenue and Stevens Avenue.

All entrances would provide full movement driveways allowing inbound and outbound movements. The Project driveways are proposed to be unsignalized.

Pedestrian access to and from the project site would be provided via new and/or improved perimeter sidewalks along South Nardo Avenue and Stevens Avenue.
(5) Grading: To the extent feasible, natural topography and scenic features of the site shall be retained and incorporated into the proposed development. Any grading or earth-moving operations in connection with the proposed development shall be planned and executed to blend with the existing terrain both on and adjacent to the site. Existing exposed or disturbed slopes shall be landscaped with native or naturalized non-native vegetation and existing erosion problems shall be corrected.

Grading is proposed in the amount of 187,000 cubic yards with approximately 160,000 cubic yards of soil to be exported off-site.

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The project site varies from an elevation of approximately 39 to 150 feet above MSL, sloping upward from southeast to northwest.

The majority of the proposed grading is intended to facilitate a general lowering of elevations on the site to address the potential for private view impairment and to facilitate internal circulation for pedestrians as well as vehicles.

The Engineering Department has included a condition of approval that the Applicant shall participate in the Sand Compatibility and Opportunistic Use Program (SCOUP) and deposit beach
compatible sands / sediment exports on city beaches if the Applicant’s soil engineer determines that any or all of the soil to be exported is compatible with beach sediments in accordance with the City’s SCOUP permits.
(6) Lighting: Light fixtures for walkways, parking areas, driveways, and other facilities shall be provided in sufficient number and at proper locations to assure safe and convenient nighttime use. All light fixtures shall be appropriately shielded so that no light or glare is transmitted or reflected in such concentrated quantities or intensities as to be detrimental to the surrounding areas per SBMC 17.60.060 (Exterior Lighting Regulations).

Conditional approval of this Project includes the requirement that all new exterior lighting fixtures be in conformance with the CityWide Lighting Regulations of the Zoning Ordinance (SBMC

17.60.060). All light fixtures will be shielded so that no light or glare is transmitted or reflected in such concentrated quantities or intensities as to be detrimental to the surrounding area. Adequate lighting shall be provided in all parking areas used by the public for safe pedestrian and vehicular movement. A minimum lighting level of 0.2 foot-candles is required for all parking areas. All lights provided to illuminate any loading space or parking area shall be designed, adjusted, and shielded to avoid casting light toward public roads and adjoining residential properties.
(7) Usable Open Space: Recreational facilities proposed within required usable open space shall be located and designed to maintain essential open space values.

The Project is a high-density residential development within the HR Zone and, pursuant to the SBMC, requires common usable open space in the amount of 250 square feet per residential unit for a total of 65,000 square feet. The proposed project provides a total of 65,434 square feet of open space.

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In addition, as designed, each of the proposed residential units has its own patio (first floor units) or balcony (for second floor units) that is directly accessed from the residence.

The proposed project includes passive usable open space areas.

Additionally, the proposed project would include a small park area, along South Nardo Avenue.

The site currently has a recorded easement as part of the County of San Diego’s approval of Special Use Permit No. P. 68-187 prior to the City’s incorporation. The language of the recorded easement specifically allows for amendments to the original Special Use Permit (SUP) as well as additional activities authorized by the Grantee. By virtue of city incorporation, the City now holds the recorded easement’s Grantee interest. As such, the site is subject to the City’s zoning regulations. Provided that all the required findings for issuance of the City’s Development Review Permit (DRP) can be made, it would constitute the Grantee’s authorization and act as an amendment to the SUP or supersede the SUP in its entirety.

III. Portions of the property that is the subject of this application are subject to a Grant of Open Space Easement recorded July 6, 1970 in the Official Records of San Diego County for the benefit of the County of San Diego as Grantee. The City is now the Grantee as the successor in interest to the County upon incorporation.

The Open Space Easement provides that:
(i) no portion of the Open Space shall be graded, excavated or filled except in compliance with said Special Use Permit No. P 68-187 (as the same may be from time to time amended) or an authorization by Grantee in implementation thereof and (ii) no natural or artificial improvements shall be constructed, installed, erected, permitted or maintained (other than the natural and artificial improvements complying with said Special Use Permit No. 68-187 (as the same may be from time to time amended) or an authorization by Grantee in implementation thereof).

The City's requirements for a Development Review Permit and a Structure Development Permit are equivalent to the Special Use Permit approved by the County in 1970, and the City's approval of the Development Review Permit and the Structure Development Permit constitutes an amendment to Special Use Permit No. 68-187, allowing development and grading of the site as shown on the approved plans.

The City as Grantee hereby authorizes the amendment of the Grant of Resolution 2022-006
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Open Space Easement to permit grading, excavation, and fill and construction, installation, erection, permission, and maintenance of those natural and artificial improvements as shown on the approved plans for the Development Review Permit and the Structure Development Permit.

IV. All required permits and approvals including variances, conditional use permits, comprehensive sign plans, and coastal development permits have been obtained prior to or concurrently with the development review permit.

All required permits and approvals required by the City, including the SDP, VTPM and Affordable Housing Plan, Fee Waiver, and Density Bonus with Waiver of Development Standards are being processed concurrently with the Development Review Permit.

The Project is also located within the Coastal Zone as the entire City of Solana Beach is within the Coastal Zone. As a condition of project approval, the Applicant was required to obtain a Coastal Development Permit from the CCC which was issued in May 2019 under CDP # 06- 19-0109
V. If the development project also requires a permit or approval to be issued by a State or federal agency, the City Council may conditionally approve the development review permit upon the applicant obtaining the required permit or approval from the other agency.

The FEIR that was certified for this project does not include mitigation measures that require permits or approval from other agencies. The Mitigation Monitoring and Reporting Program (MMRP) was adopted for this project as a part of certification of the FEIR. All applicant proposed project design features are included as conditions of project approval.

B. In accordance with Section 17.63.040 (Structure Development Permit) of the Solana Beach Municipal Code, the City Council finds the following:

1. The Applicant for the Project went through an extensive Structure Development Permit for the project approved by the Council in 2018 under Resolution 2018-132.

2. With the proposed modifications, the Applicant requested and received approval by the City Council of a Structure Development Permit waiver for the following modifications to Buildings 13, 19 and 24: 1) Building 13 to be modified as follows - the maximum building height of the easterly 47 feet of Building 13 will be lowered by an additional 3.0 feet (to 131.9 MSL) and allow the remaining westerly approximately 144’ feet of Building 13 to be constructed to the height of 139.9’ MSL as originally depicted and certified Resolution 2022-006
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by story pole certification dated 6/14/18. 2) Building 19 (Clubhouse) to be modified on three sides (front, rear and street side) to allow second-floor balconies open on three sides with a roof, and an exterior staircase which would project outside of the previously permitted horizontal building envelope. 3) Building 24 to be shifted approximately 60’ feet east.

3. There is no significant cumulative view impairment caused by granting the application. There have been no new or proposed projects in the area that would contribute to cumulative view impairment impacts. As described in the staff report the Applicant revised the (now approved) project to address all potential private view impairments.

4. The proposed structures are compatible with the immediate neighborhood character. The Applicant has designed the project with similar architectural features, materials, roof types and colors that can be found in the surrounding neighborhoods. The Applicant will be required to show compliance with the approved maximum height and three-dimensional building envelope that was approved by the SDP, subject to the approved modifications to Buildings 13, 19 and 24 noted above, at the time of submittal for a building permit and also prior to requesting a framing inspection.

5. CONDITIONS
The conditions contained within the original Resolutions of approval 2018-131 and 2018-132 are still in effect except as expressly modified by this Resolution as shown below.

Prior to use or development of the property in reliance on this permit, the Applicant shall provide for and adhere to the following conditions:

A. Community Development Department Conditions:

I. Prior to requesting a framing inspection, the Applicant will be required to submit a height certification, signed by a licensed land surveyor, certifying that the maximum building height of the structure does not exceed 149.5 above Mean Sea Level (MSL), measured at Story Pole #39 and 47.1’ above the lowest point of the existing/proposed grade at Story Pole #86 as measured from the lower of the existing or proposed grade, and is in conformance with the plans as approved by the City Council on December 17, 2018 and as modified and as approved by the City Council under this Resolution on January 12, 2022 and the certified story pole plot plan and certifying the maximum building height of all framing and structures do not exceed the heights referred to herein and in the Project plans.

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II. BUILDING HEIGHTS.
a. Finished Building Heights. The maximum finished height of all buildings and structures of the Project shall not exceed the maximum finished heights set forth on the Initial Project Plans and the modification thereto for Building #12 (lowers the finished height), Building #13 (lowers the finished height), and Building #10 (expands the building envelope without increasing the finished height) submitted by the Applicant to the City and presented to the View Assessment Commission on October 16, 2018 and November 20, 2018 concerning the Structure Development Permit for the Project (the “Modifications to Project Plans”) to address the applications for View Assessment filed for the Project. The maximum finished heights include but are not limited to installation of roofing materials, parapet walls, if any, mechanical equipment (including heating, ventilation, and air conditioning equipment) and related screening of each roof or roof section. The “Initial Project Plans” and “Modifications to Project Plans” are collectively referred to as the “Project Plans”
i. The Applicant shall modify Building 13 maximum height to lower the maximum building height of the easterly 47 feet of Building 13 by an additional 3.0 feet (to 131.9 MSL) and allow the remaining westerly approximately 144’ feet of Building 13 to be constructed to the height of 139.9’ MSL as originally depicted and certified by story pole certification dated 6/14/18. b. Confirmation of Building Heights Before Framing Inspection. Within sixteen (16) months after the City Council’s approval of the Development Review Permit for this Project (as conditioned by the City Council), but no later than March 1, 2023, the Applicant shall prepare and submit to the City Manager a chart in the form and content acceptable to the City Manager which at a minimum sets forth the following information for each roof or roof section of each building or structure in the Project:
(i) The building number for each building as set forth on the Preliminary Grading Plan (or identify the structure if no number) and the height of those story poles and the height of the ridge(s) of each roof and roof section of each building or structure and the applicable story pole number for each roof ridge;
(ii) The maximum height based on Mean Sea Level (MSL) elevation of the completed framing for each ridge of each roof and roof section of each building or structure before installation of Resolution 2022-006
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anything on the rough framing, including installation of roofing materials or other materials or equipment; and
(iii) The maximum finished height based on Mean Sea Level (MSL) elevation for each ridge of each roof and roof section of each building or structure after installation of roofing materials, parapet walls, if any, mechanical equipment (including heating, ventilation, and air conditioning mechanical equipment) and related screening of each roof and roof section.

The foregoing maximum heights shall be consistent with the maximum finished heights set forth in the Project Plans. c. Roof Slopes. The slopes of the roofs shall not be decreased or increased.

III. EXTERIOR MATERIALS.
a. Materials Approved. When constructing the buildings in the Project, the Applicant shall use exterior materials that are of the same type and design and have the same appearance, finish, and architectural design significance and are substantially the same or better quality as the exterior materials shown in the plans, illustrations, photographs, photo and electronic simulations, renderings, and other visual and graphic images submitted by the Applicant to the City Council to obtain approval of this Project. The Project, including the affordable senior housing units, shall be constructed with the same design type and same or betterquality materials as shown on such visual and graphic images as approved by the City under this Resolution.

IV. PARKING.
a. Addition of Parking Spaces on Lot B. The Applicant has proposed a total of five hundred twenty-five (525) total parking spaces for the Project allocated as follows: 488 spaces for Lot A; and 37 spaces for Lot B. The Applicant has subsequently agreed to add six (6) additional parking spaces on Lot B for a total of 43 spaces on Lot B.

The six (6) additional spaces shall be added at the north side of the proposed parking area for Lot B. The six (6) additional parking spaces shall be designated as “visitor” parking.
b. Quantity of Parking Spaces for the Project. All references to “parking spaces” mean parking for cars and trucks, not motorcycles.

The Applicant has proposed a total of 525 parking spaces for the Project. With the six (6) additional visitor parking spaces for Lot B Resolution 2022-006
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as provided in Subsection (a) above, the Project and Project Plans shall provide a total of five hundred thirty-one (531) parking spaces (a cumulative total for tenants and visitors) for the Project (includes Lot A [market rate apartments] and Lot B [affordable senior apartments]). All parking spaces shall be in compliance with the City’s Off-Street Parking Manual.

The zoning applicable to the Project based on the type of apartments (e.g., amount of bedrooms in each apartment) and quantity of apartments in the Project requires a total of 494 parking spaces (this is the total for both tenants and visitors, and includes ADA parking spaces). The Project shall provide a total of 531 parking spaces. Thus, in order for the Applicant to provide 531 parking spaces, the Project and Project Plans shall provide the 494 parking spaces required by zoning plus an additional 37 extra parking spaces.

The 531 parking spaces are allocated as follows:
(i) 488 Lot A; and
(ii) 43 Lot B.
1) LOT A. There shall be a total of four hundred eighty-eight (488) parking spaces on Lot A, and these parking spaces shall be allocated as follows:

There will be a maximum of 343 reserved parking spaces
available for tenants, at least 88 unreserved parking spaces available for tenants, and 57 visitor parking spaces. Thus, the 488 parking spaces are allocated as follows:
343 maximum reserved parking spaces for tenants (based
on 1 space for studio apartment, 1 space for one
bedroom, and 2 spaces for two bedrooms)
88 minimum unreserved parking spaces for tenants
57 visitor parking spaces (228 apartments = 57 visitor
spaces)
= 488 total parking spaces on Lot A
2) LOT B. There shall be a total of forty-three (43) parking spaces on Lot B, and these parking spaces shall be allocated as follows:

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There will be a maximum of 37 reserved parking spaces
available for tenants, no unreserved parking spaces for tenants, and 6 visitor parking spaces. Thus, the 43 parking spaces are allocated as follows:
37 maximum reserved parking spaces for tenants (based
on 1 space for studio apartment, 1 space for one
bedroom, and 2 spaces for two bedrooms)
0 minimum reserved parking spaces for tenants
6 visitor parking spaces
= 43 total parking spaces on Lot B
c. Reserved Parking Spaces for Tenants. The Applicant shall assign reserved parking spaces for tenants of the Project as provided herein. However, the Applicant shall not reserve for or assign to any tenant more reserved parking spaces than as follows: 1 parking space for a studio apartment; 1 parking space for a one-bedroom apartment; and 2 parking spaces for a two bedroom apartment. The Applicant shall not reserve any “visitor” parking spaces on the Project.

The Applicant shall prepare a written parking plan (the “Parking Plan”) and identify thereon which garages, carport parking spaces, and uncovered parking spaces are assigned to each apartment as reserved parking spaces for each apartment and the location of all unreserved tenant parking spaces and visitor parking spaces in the Project. The Applicant shall submit the Parking Plan to the City Manager on or before September 1, 2023 for approval thereafter by the City Council.

With regard to the parking spaces on Lot A, the Applicant shall assign one (1) garage parking space to each apartment (to the extent there are sufficient quantity of garages, noting there are more apartments than garages) for the exclusive use of that apartment so that all garage parking spaces on Lot A are assigned to specific apartments. After assigning all garage parking spaces to specific apartments, then the Applicant shall assign one (1) covered carport parking space to each apartment that does not have a garage parking space assigned to the apartment (to the extent there are sufficient quantity of carport parking spaces, noting that there are more apartments than garages and carport parking spaces combined). After all garage parking spaces and carport parking spaces have been assigned to apartments, then the Applicant shall Resolution 2022-006
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assign one (1) uncovered parking space to each of the remaining apartments that do not have a garage or carport parking space assigned to that apartment. In addition, if an apartment is a twobedroom apartment, then the second reserved parking space assigned to a two-bedroom apartment will be an uncovered parking space.

The garages that are located in the building where the apartment is located will be assigned first to the apartments located in that same building and then to the apartments located closest thereto. The same principal will be used to assign reserved carport parking spaces and reserved uncovered parking spaces.

The apartment and the garage and/or covered carport parking space and/or uncovered parking space(s) assigned to each specific apartment for the exclusive reserved use of the tenant of that apartment shall constitute single premises for the purpose of the rental of that apartment.

Tenants who have apartments with assigned reserved parking space(s) (either garage, carport, and/or uncovered parking space) shall be required by their lease to park in their assigned reserved parking spaces and not in the unreserved parking spaces. The Applicant shall strictly enforce this requirement by providing appropriate enforcement provisions and remedies in the leases, including monetary penalties and/or towing for violations.

For the purpose of example and not for limitation, if the tenant of a two-bedroom apartment consists of two occupants with two vehicles and the tenant’s apartment has a reserved garage parking space and a reserved uncovered parking space assigned to the tenant’s two bedroom apartment, then the tenant shall park in the garage and reserved uncovered parking space and shall not park in an unreserved parking space. However, if there are three occupants of the two-bedroom apartment and the assigned garage and reserved uncovered parking spaces are being used by two of the occupants, then the third occupant will park in an unreserved uncovered parking space.

The purpose of the requirements herein is to have each garage and covered carport parking space assigned to a specific apartment to ensure that all garages and covered carport parking spaces in the Project will be used for parking before the unreserved tenant parking spaces are used, thereby making available to tenants of the Project as many unreserved uncovered parking spaces as possible for the shared use of all tenants of the Project. With parking spaces Resolution 2022-006
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available in the Project, tenants are discouraged from parking off site in the neighborhood surrounding the Project.
1) Request by the Applicant for Conversion of Unreserved Parking Spaces to become Reserved Parking Spaces on Lot A. The
existing development on the Property that will be demolished to construct the Project does not have sufficient parking spaces for the tenants and visitors of the Property. Consequently, many tenants and visitors to the Property park on the streets in the neighborhood near the Property. This has caused a shortage of parking in the neighborhood and other negative impacts.

The Applicant has represented to the residents of the
neighborhood and area near the Property and the City Council that the 531 parking spaces to be provided by the Project will provide a sufficient quantity of parking spaces for tenants and visitors of the Project so that they can park on the Property, not on the streets of the surrounding neighborhood. However, if the Applicant wants to increase the amount of uncovered reserved parking spaces on Lot A by converting some of the “unreserved” uncovered parking spaces to become “reserved” uncovered parking spaces (Applicant shall not increase the amount of reserved parking spaces on Lot B), then the Applicant may request approval from the City Council to convert up to thirty-one (31) of the eighty-eight (88) total unreserved uncovered parking spaces to become reserved uncovered parking spaces.

In addition to the foregoing, the opportunity for the Applicant to request modification of the Parking Plan as provided herein shall include the opportunity for the Applicant to request modification of the allocation of reserved and unreserved parking spaces for tenants of the Project and consideration of other issues concerning the management of tenant and visitor parking for the Project in order to achieve the goal of preventing tenants and visitors of the Project from parking on South Nardo Avenue and on the streets in the surrounding neighborhoods.

In connection with the Applicant’s request, the Applicant shall submit a proposed modified Parking Plan which identifies and changes such unreserved uncovered parking spaces to become reserved uncovered parking spaces (the “Modified Parking Plan”) to the City Council for approval. The Modified Parking Plan shall be accompanied by documentary analysis, data, and information which establish and demonstrate that the
Appplicant’s proposed Modified Parking Plan will not cause, encourage, or otherwise result in tenants or visitors of the Project Resolution 2022-006
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parking on the streets in the neighborhood adjacent to the Project and will eliminate and prevent on-street parking by tenants and visitors. The goal and actual effect of any Modified Parking Plan shall be to have all tenants and visitors of the Project park in the Project, not on nearby streets, and eliminate or prevent their on-street parking and the reasons or incentives for tenants and visitors to park on the streets. The Modified Parking Plan shall demonstrate that it will achieve this goal and produce the actual desired result and thereafter it shall actually achieve this goal.

If the Applicant elects to request an increase in the amount of reserved uncovered parking spaces by converting unreserved uncovered parking spaces as provided herein, then the Applicant shall submit the Modified Parking Plan and supporting analysis and documents required herein to the City Manager on or before September 1, 2023 for consideration and approval thereafter by the City Council.
d. Unreserved Parking Spaces for Tenants. All unreserved parking spaces shall remain open for parking by all tenants of the Project who do not have a reserved parking space for their use as provided herein. The leases for tenants shall provide that tenants shall use their reserved parking spaces first before using any unreserved parking spaces. The Applicant shall strictly enforce this requirement by providing appropriate enforcement provisions and remedies in the leases, including monetary penalties and towing for violations. e. Visitor Parking Spaces. The visitor parking spaces shall be marked with signage as “visitor parking.” The size, design, and location of signage for visitor parking shall be in compliance with the City’s OffStreet Parking Manual and approved by City Manager. The visitor parking spaces shall be distributed evenly throughout the Project as approved by City Manager. The Applicant shall not reserve any “visitor” parking spaces on the Project.
f. Tenants Shall Not Park in Visitor Parking Spaces. Tenants shall not be permitted to park in visitor parking spaces. The leases for tenants of the Project shall provide that tenants shall not park in parking spaces with signage stating the space is “visitor” parking.

Notwithstanding the foregoing, tenants may park in visitor parking spaces only between the hours of 11:00 p.m. and 8:00 am. if such spaces are not in use during this time period. The Applicant shall strictly enforce this requirement by providing appropriate enforcement provisions and remedies in the leases, including monetary penalties and towing for violations.

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g. No Charge for Parking. There shall not be any charge or fee to park in the Project, whether for any tenant of the Project (reserved or unreserved parking spaces) or their respective invitees, guests, and visitors. There shall not be any charge or fee for any parking spaces for tenants (reserved or unreserved), whether the parking spaces are provided as required by zoning or not, any parking spaces for visitors, and for any parking spaces constructed in the Project that exceed the total amount of spaces required by zoning.

The foregoing prohibition against the Applicant charging for any parking spaces in the Project shall not apply to the Applicant charging a higher rent for each apartment that includes exclusive reserved use of a specific identified garage and/or covered carport parking space assigned to that specific apartment for the exclusive use of that apartment. However, in order to permit this exemption from the prohibition against charging for parking spaces, each garage and uncovered carport parking space in the Project shall be assigned to a specifically identified apartment for the exclusive use of that apartment, with one garage or covered carport parking space assigned to each apartment as provided in Subsection (c) above.

The garage parking spaces and covered carport parking spaces shall be assigned to the extent of the quantity of garages and covered carport parking spaces in the Project (i.e., there are more apartments than garages and carport parking spaces).
h. Access to Parking. There shall not be any gate, barrier, or other restriction to access any driveway/vehicle access to the Project. i. No Assignment to Third Party. No parking spaces in the Project shall be assigned, sold, conveyed, transferred to any third party owner or otherwise reserved for any tenant beyond the amount of parking spaces allocated to the tenant’s type of apartment as provided herein.
j. Garages Shall be Used for Parking. All leases and rental agreements for tenants or occupants of the Project shall provide that garages and covered parking spaces in carports shall be used for vehicle parking and incidental storage of personal property. The Applicant shall strictly enforce this requirement by providing appropriate enforcement provisions and remedies in the leases, including monetary penalties for violations.
k. All garages shall be pre-wired for electric vehicle charging as identified in exhibit provided to City Council on December 17, 2018 Resolution 2022-006
2020-002 Solana Highlands DRP Modification and SDP Waiver H.G. Fenton

l. A minimum of 15 electric vehicle (EV) charging stations shall be installed consistent with the exhibit provided by City Council on December 17, 2018. Tenants shall not be permitted to park in EV parking spaces unless used for charging purposes. The leases for tenants of the Project shall provide that tenants shall not park in EV parking spaces with signage stating the space is “EV” parking.

Notwithstanding the foregoing, tenants may park in EV parking spaces only between the hours of 11:00 p.m. and 8:00 am. if such spaces are not in use during this time period. The Applicant shall strictly enforce this requirement by providing appropriate enforcement provisions and remedies in the leases, including monetary penalties and towing for violations.

V. Fifty-seven (57) guest parking spaces shall be marked as permanent guest spaces and may not be assigned or reserved for any tenant, occupant or employee.

VI. A Parking Management Plan, as approved by the City Council, shall be in place to prevent resident use of adjacent street parking. The Parking Management Plan shall contain provisions in tenant leases that clearly restrict the garage space use from impeding the ability to park an automobile in the garage and allow garages to be inspected periodically.

VII. LANDSCAPE PLAN.

The Applicant has submitted to the City Council a Final Landscape Plan which is part of the Project for consideration by the City Council concerning the Development Review Permit Modification Request for the Project.

The Landscape Plan shall comply with the following requirements:
a. Mix. The mix of trees shall be at least 70% or more evergreen and no more than 30% deciduous.
b. Quantity. At a minimum, the quantity of trees and other vegetation shown on the Landscape Plan shall be maintained. The landscape buffer areas shall be planted with trees and vegetation that provide at least ninety percent (90%) coverage of the landscape buffer area. c. Quality. Trees and other vegetation shall be the same or better architectural significance and design value (as these terms are customarily used by landscape design professionals from time to time during the life of this Project) and quality as shown on the Landscape Plan.

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2020-002 Solana Highlands DRP Modification and SDP Waiver H.G. Fenton

d. Requirement to Maintain Landscape Trees and Vegetation. The Applicant shall maintain the landscape buffer areas with trees and vegetation that have a level of architectural significance and design value and quality that is substantially the same or better than as shown on the Landscape Plan. Such trees and other vegetation shall not be removed unless concurrently replaced.
e. Removal and Replacement. Trees and other vegetation shall not be removed without concurrently replacing same. When replacing trees and other vegetation, the Applicant shall maintain the same or better level of architectural significance, design value and quality shown on the Landscape Plan. Also, when replacing trees, the Applicant shall replace with equal or larger size of the trees as indicated in the Landscape Plan.
f. Final Landscape Plan. The Applicant shall submit the “Final Landscape Plan” for consideration and approval by the City Council.

Selection of the species of trees (including the height of trees at maturity) and placement of the trees throughout the Project, including in all landscape buffer areas, for the Final Landscape Plan shall consider and mitigate potential for blocking views of residences located on South Nardo Avenue that filed view claims concerning this Project.
(i) Landscaping and tree heights shall be specifically addressed as part of the Final Landscape Plan and shall demonstrate that, at maturity, trees and landscape shall not exceed the height of Building 12 within the view corridor between Buildings 2 and 3, Buildings 11 and 12 and Buildings 13, 14 and 17.

VIII. LANDSCAPE BUFFER AREAS.
a. Landscape Buffer Areas. The “landscape buffer area” means the area between the facades of the buildings in the Project that are located along the boundary line of the Property and the adjacent boundary line of the Property or the edge of the sidewalk at a public street that is closest to the building facades, whichever is closer to the building facades. Where there is a parking area along the perimeter of the Project, the Landscape buffer area is the area between the boundary line of the Property or the edge of the sidewalk at a public street that is closest to the parking area and the edge of the paved parking area. However, at various locations along the perimeter of the Project on the south and west sides of the Project there is no sidewalk, and the landscape buffer areas consists of the area between the building facades (or edge of the paved parking area) and the boundary line of the Property.

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2020-002 Solana Highlands DRP Modification and SDP Waiver H.G. Fenton

There is a landscape buffer area around the entire perimeter of the Project, except at the three locations where a driveway crosses the landscape buffer area. The landscape buffer areas are provided by the placement of the buildings and structures set back from the property boundary lines as depicted on the Project Plans, including the Site Plan (Sheet O-1.1) and Preliminary Conceptual Landscape Plan (Sheet L-0.1) that are part of the Project Plans.

The landscape buffer areas are shown on the Project Plans, including the Site Plan and Preliminary Grading Plan therein. The landscape buffer area shall be increased as described herein and specifically depicted and identified on the Site Plan and the updated final Landscape Plan that are part of the Project Plans.

The landscape buffer areas shall be planted with trees and other vegetation as provided herein to screen the Project from the public streets, adjoining properties, and other properties in the area of the Project. The landscape buffer areas shall be planted with trees and vegetation that provide at least ninety percent (90%) coverage of the landscape buffer area.
b. Modify Landscape Buffer Areas. The minimum width of the landscape buffer areas between Building #25 and the parking area located east of Building #25 and the property to the south, and at Building #6 shall be expanded as follows:
(i) Building #25 - a minimum twenty-five (25) feet wide; (ii) Parking area east of Building #25 – twenty (20) feet wide; (iii) Remove hardscape improvements in Landscape Buffer area on north side of Building #6.
c. Requirement to Maintain Minimum Size of Landscape Buffer Areas.

The dimensions (i.e., distance east to west, and north to south) and useable area of the landscape buffer areas as set forth herein shall be maintained and shall not be reduced. No portion of any landscape buffer area shall be converted to patios, decks, walkways, driveways, or other non-landscape uses, except as provided in subsection (d) below entitled “Exceptions to Landscape Buffer Area.”
d. Exceptions to Landscape Buffer Area. Except as expressly permitted herein, no patios, decks, walkways, seating, or other hardscape improvements, or other non-landscape uses are permitted in any of the landscape buffer areas referenced herein:

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2020-002 Solana Highlands DRP Modification and SDP Waiver H.G. Fenton

(i) Two Driveways Along South Nardo Avenue and One Driveway on Stevens Avenue. There shall not be more than three (3) driveways/vehicle entrances to the Project. There are two driveways that provide access to the Project along South Nardo Avenue and one driveway on Stevens Avenue that serves
Building #25; and
(ii) Walkways in the Landscape Buffer Areas Next to and Along the Building Facades. Allow one walkway in the landscape buffer areas next to the building facades. These walkways are shown on the Preliminary Grading Plan. These walkways provide access to the apartments in these residential apartment buildings. These walkways shall not be wider than four (4) feet, including any built-in benches, seating, planters, or other improvements associated with or concerning the walkway. e. Pocket Park on South Nardo Avenue. There shall be an open space park area located along and contiguous with South Nardo Avenue between Building #2 and Building #4 as identified on the Preliminary Grading Plan. The minimum dimensions of the area of the park are fifty-three (53) lineal feet measured generally from north to south (approximately perpendicular to South Nardo Avenue) and ninetyfive (95) lineal feet measured generally from east to west. This open space area will be used as a park for residents and visitors of the Project. The entire area of this park area will be landscaped with grass and other vegetation as set forth on the Landscape Plan that provide at least ninety percent (90%) coverage of the area. There shall not be any hardscaped area or other improvements
constructed or installed within this park area, except the area for installation of a small patio and barbeque, not to exceed a total of two hundred (200) square feet, at the location(s) shown on the Project Plans.
f. The Final Landscape Plan shall be reviewed and approved by the Santa Fe Irrigation District/San Elijo Joint Powers Authority (JPA) and the County of San Diego Department of Environmental Health prior to building permit issuance.
g. Engineering review shall be conducted by EsGil for Final Landscape Plan Construction Drawings contained on Sheets LC-01 through and LC-13 prior to building permit isuance.

B. Engineering Department Conditions:

I. PUBLIC IMPROVEMENTS/TRAFFIC CALMING PLAN
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2020-002 Solana Highlands DRP Modification and SDP Waiver H.G. Fenton

The following engineering conditions (1 thru 13 under Public Improvements) are required to improve the existing roadway network adjacent to and in general vicinity of the proposed project boundary consistent with the City’s circulation element and implementing certain recommendations of the City’s Comprehensive Active Transportation Strategies (CATS) Program in satisfaction of the Traffic Impact Fee (TIF) requirement. The Applicant shall construct and install the improvements set forth on the Off-Site Improvement Plan dated December 3, 2018 (the “Off-Site Improvement Plan”) as modified by the Traffic Calming Plan exhibit dated January 2022 submitted by the Applicant to the City concerning the Development Review Permit for the Project. The Applicant shall obtain an Engineering permit for construction of public improvements to the satisfaction of the City Engineer as follows:
(1) The applicant shall be responsible for enhancement to the operation of Turfwood driveway access at Valley Avenue. These Enhancements may include but not be limited to:
(a) Striping the Turfwood driveway for a distance of approximately 50 feet from Valley Avenue to accommodate one inbound lane, one outbound left turn lane, and one outbound right turn lane.

Additionally, the applicant shall install “Keep Clear” legend on Valley Avenue at Turfwood driveway.
(b) Working with the City Engineer and the adjacent property owner to improve the sight visibility line for vehicles exiting Turfwood Lane. If the adjacent property owner is uncooperative, the applicant is not obligated to provide any improvements outside of the existing right of way.
(c) Installation of a “Solar Powered Electronic Speed Sign” on Southbound Stevens Avenue or other means to calm traffic approaching Turfwood driveway access.
(d) The Applicant shall monitor the traffic pattern and delay at the Turfwood Lane Access to the Valley Avenue four times (two times during morning and two times during afternoon peak hours) within one year after full implementation of the above measure. Upon completion of the field observation and monitoring efforts, a report prepared by a professional traffic engineer shall be delivered to the City Engineering office. If additional enhancement is warranted, the Applicant shall implement the project’s share of the required improvements at a cost not to exceed $50,000 to the satisfaction of the City Engineer.

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2020-002 Solana Highlands DRP Modification and SDP Waiver H.G. Fenton

(2) The Applicant shall reconstruct the southwesterly curb return at the intersection of Nardo Avenue and Stevens Avenue. The Applicant shall place thermoplastic continental pedestrian crossing striping at the north and west side of the intersection. The Applicant shall replace the pedestrian ramps at the northwest corner and east side of the intersection to the satisfaction of the City Engineer.
(3) On west side of Valley Avenue, south of Nardo Avenue provide appropriate regulatory signs to prohibit left turn out of the proposed driveway for the senior housing complex.
(4) On south Nardo Avenue west of Stevens Avenue install a raised concrete median and corresponding signage, striping, and pavement legends to channelize traffic. This may require elimination of on-street parking along South Nardo on both sideS of the street.
(5) On northwest, southwest, and northeast corner of South Nardo Avenue and Fresca Street, install concrete curb extensions. This will require elimination of two (2) on-street parking spaces along south side of Nardo Avenue. The proposed curb extensions shall be designed to accommodate ADA compatible pedestrian ramps on both sides of Nardo Avenue. The applicant shall also install thermoplastic continental crosswalk for pedestrian crossing at the stop-controlled north leg of South Nardo Avenue/Fresca Street and a solar powered pedestrian crossing flashing sign with corresponding signage.
(6) On Nardo Avenue install raised concrete chokers with sufficient lengths and widths. The applicant shall enter into an
Encroachment Maintenance and Removal Agreement (EMRA) for maintenance of any landscaping and irrigation system in these features. Additionally the applicant shall install two “Solar Powered Electronic Speed Signs” within this segment of Nardo Avenue. (7) The Applicant shall place thermoplastic continental pedestrian crossing striping on Nardo Avenue north side of Solana Circle and on Solana Circle west side of Nardo Avenue to the satisfaction of the City Engineer. City will perform appropriate analysis and report to the City Council. If directed by the City Council, City Staff would facilitate the installation of new stop signs on south Nardo Avenue at Nardito Lane and Solana Circle with corresponding signs and legends.

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2020-002 Solana Highlands DRP Modification and SDP Waiver H.G. Fenton

(8) The applicant Shall Construct two Chokers (Physically narrowing the road width by extending the curbs and installing a short median section) between Nardito Lane and Fresca Street with corresponding signs and pavement legends to the satisfaction of the City Engineer.
(9) On both sides of South Nardo between Solana Circle and Stevens Avenue install Sharrow marking pavement legends.
(10) Construct all sewer lateral connections to the City sewer main consistent with City Standards.
(11) Construct all proposed driveway entrances to the project on South Nardo Avenue and Valley Avenue consistent with City Standards. (12) Construct all storm drain connections to the City curb or storm drain system consistent with City Standards.
(13) The existing sewer main serving this property, proposed to be replaced, shall be abandoned in the public right-of-way by plugging the street manhole connection and plugging the pipe at the right-of-way line. The sewer connection(s) for 821 Stevens Avenue shall be capped at the main.
(14) Connect to the existing recycled waterline on Stevens Avenue.

The applicant shall coordinate with Santa Fe Irrigation District, San Elijo Joint Powers Authority and County Health Department for this extension project. All irrigation system including the ones in the public right of way shall be provided by recycled water. (15) The Applicant shall continue to work with City Staff to develop the Traffic Calming Plan referenced herein. Upon completion, the Traffic Calming Plan shall be subject to future consideration and approval by the City Council.

6. ENFORCEMENT: Pursuant to SBMC 17.72.120(B) failure to satisfy any and all of the above-mentioned conditions of approval is subject to the imposition of penalties as set forth in SBMC Chapters 1.16 and 1.18 in addition to any applicable revocation proceedings. The conditions of approval for the project shall remain in place until such time they may be amended or superseded by subsequent City Council action.

7. EXPIRATION: The vesting tentative map shall expire 24 months after the date of Coastal Commission CDP permit issuance and may be extended as provided by State law or Section 16.12.110, whichever provides the longest extension. All Resolution 2022-006
2020-002 Solana Highlands DRP Modification and SDP Waiver H.G. Fenton

other approvals granted by this resolution shall expire 60 months after the date of Coastal Commission approval and may be extended as provided by Section

17.72.110.

8. INDEMNIFICATION AGREEMENT: The Applicant shall defend, indemnify, and hold harmless the City, its agents, officers, and employees from any and all claims, actions, proceedings, damages, judgments, or costs, including attorney’s fees, against the City or its agents, officers, or employees, relating to the issuance of this permit including, but not limited to, any action to attack, set aside, void, challenge, or annul this development approval and any environmental document or decision. The City will promptly notify the Applicant of any claim, action, or proceeding. The City may elect to conduct its own defense, participate in its own defense, or obtain independent legal counsel in defense of any claim related to this indemnification. In the event of such election, Applicant shall pay all of the costs related thereto, including without limitation reasonable attorney’s fees and costs. In the event of a disagreement between the City and the Applicant regarding litigation issues, the City shall have the authority to control the litigation and make litigation related decisions, including, but not limited to, settlement or other disposition of the matter. However, the Applicant shall not be required to pay or perform any settlement unless such settlement is approved by Applicant.

9. NOTICE TO APPLICANT: Developer is hereby notified, as required by Government Code Section 66020, that the approved plans and the conditions of approval and ordinances governing fees and exactions in effect at the time the project is approved constitute written notice of the description of the dedications, reservations, amount of fees and other exactions related to the project. As of the date of project approval, the 90 day period has begun in which developer may protest any dedications, reservations, fees or other exactions imposed by the City.

To protest the imposition of any fee, dedications, reservations or other exactions described in this resolution you must comply with the provisions of Government Code Section 66020. Failure to file a protest in compliance with all of the requirements of Government Code Section 66020 will result in a legal bar to challenging the dedications, reservations, fees or other exactions.

PASSED AND ADOPTED at a regular meeting of the City Council of the City of Solana Beach, California, held on the 19
h day of February 2022, by the following vote:

AYES: Councilmembers –
NOES: Councilmembers –
ABSENT: Councilmembers –
ABSTAIN: Councilmembers –
Resolution 2022-006
2020-002 Solana Highlands DRP Modification and SDP Waiver H.G. Fenton

LESA HEEBNER, Mayor
APPROVED AS TO FORM: ATTEST:

JOHANNA N. CANLAS, City Attorney ANGELA IVEY, City Clerk From: Mike Nunn
To: Joseph Lim
Subject: Fwd: HG Fenton project discussion at this evening"s city council meeting –– Case No. DRP MOD 20-002 for DRP/SDP/VTM 17-14-29
Date: Wednesday, January 26, 2022 1:27:08 PM
Begin forwarded message:

From: Mike Nunn <
Subject: HG Fenton project discussion at this evening's city council meeting –– Case No. DRP MOD 20-002 for DRP/SDP/VTM 17-14-29 Date: January 26, 2022 at 1:22:14 PM PST
To: [email protected]
Cc: Phil Weber
This note is to express our support of using the view assessment process to evaluate changes proposed by HG Fenton. We (Phil Weber and Mike Nunn) live at 639 Nardito Lane and were involved in the prior view assessment for the Solana Highlands renewal project. Our claims of potential loss of view, together with those of others, led to significant changes in the original project design through the city’s view assessment process .

HG Fenton has now requested a change to the approved plan, including a 5 ft increase in height for 139.9 ft of one of the buildings, and moving a second building into a new area where views might be impacted. We would request that these changes be treated the same as any other change in structure heights in the city: that story poles be put in place so neighbors can assess the impact that these modifications will have on the surrounding community. … If any other home were going to increase in height by 5 feet, story poles would be required for the change. If any other building were going to be moved by 60 feet, we would need to evaluate it. And if a large balcony, with a modification to the roof line were to be added to a house, that would also need by evaluated by our city's view assessment process.

We urge the city council to follow the laws and codes of the City of Solana Beach, enforce the view assessment process, and deny the applicants request to proceed without full evaluation of their proposed changes to previously approved plans.

Thank you,
Michael Nunn, PhD
Nardito LAne
Solana Beach, CA 92075
(858) 342-1458
■
[email protected]
CITY COUNCIL ACTION:
______________________________________________________________________ ______________________________________________________________________ AGENDA ITEM # C.1.

STAFF REPORT

CITY OF SOLANA BEACH
TO: Honorable Mayor and City Councilmembers
FROM: Gregory Wade, City Manager
MEETING DATE: February 9, 2022
ORIGINATING DEPT: Finance Department
SUBJECT: Fiscal Year 2020-21 Annual Comprehensive Financial Report (ACFR)
BACKGROUND:

The City’s financial policies specify that each year the City’s financial statements are to be audited by a firm of independent Certified Public Accountants (CPA’s) and that the auditor’s opinion is to be included in the financial statements as is required by Generally Accepted Accounting Principles (GAAP). An independent audit is essential to demonstrate the accountability of government officials’ use of public resources and provides a basis for user acceptance of the audited financial statements.

This item is before the City Council to accept and file the Fiscal Year (FY) 2020-21 Annual Comprehensive Financial Report (ACFR) (Attachment 1) and receive a presentation by the City’s Independent Auditors, Lance, Sol & Lunghard, LLP, on the City’s financial condition as of June 30, 2021.

DISCUSSION:

Staff is presenting the FY 2020-21 ACFR for Council’s review. The ACFR is a detailed report that goes beyond the requirements of GAAP and beyond any legal reporting requirements. The ACFR covers all funds of the government and all the financial transactions during the applicable fiscal year. It is considered a general-purpose report as its contents are intended to meet the needs of a range of user groups.

Highlights of the FY 2020-21 ACFR include the following:
• The City’s net position increased to $87,556,725, or by $3,310,854, as a result of FY2021 operations.
• Governmental net position equaled $39,480,938.
• The total revenues from all sources were $37,419,385.

February 9, 2022
FY 2020-21 ACFR

• The total cost of all City programs was $34,108,531.
• The General Fund reported an excess of revenues over expenditures and other financing sources and uses by $2,091,876.
• The General Fund’s actual resources received exceeded the final revenue budget by $1,529,852 while actual expenditures were $1,300,098 less than final budget before other financing sources and uses.

GASB Statements Regarding Pension Liabilities
Governmental Accounting Standards Board (GASB) requires government entities to report net pension liabilities in their Statement of Net Position. The standard, GASB Statement No. 68 (GASB 68), Accounting and Financial Reporting for Pensions, was issued by GASB on June 12, 2012.

Under GASB 68, governmental entities need to address net pension liability in their financial statements. Net pension liability refers to the difference between the total pension liability, defined as the present value of the projected benefit payments to employees based on past service, and the pension’s assets, generally considered to be the investments set aside to pay retirees and current employees. Since the City takes part in a cost-sharing plan, it needs to recognize its proportionate share of the collective net pension liability and expense for the plan.

GASB 68 also requires governments to immediately recognize annual service costs and interest on the pension liability, as well as the effects of any changes in benefit terms. Since pension expenses are now viewed over the service period of the plan member, governments also have to deal with how changes in economic and demographic assumptions used to project benefits affect the pension, as well as with differences between assumptions and actual experiences. Governmental entities also need to recognize, over a five-year period, the effects of differences between expected and actual investment returns.

The provisions in GASB 68 were effective for financial statements for periods beginning after June 15, 2014.

As of June 30, 2021, the City of Solana Beach reported net pension liabilities for its proportionate shares of the net pension liability of each Plan as follows, with a comparison to the net pension liability of each Plan as of June 30, 2020:

Proportionate Share of Net Pension Liability
FY 2019-20 FY 2020-21 Difference
Miscellaneous $ 5,668,839 $ 6,151,557 $ 482,718
Safety 9,611,934 10,505,198 893,264
$ 15,280,773 $ 16,656,755 $ 1,375,982
The City of Solana Beach’s net pension liability of each of the Plans is measured as of June 30, 2019, and the total pension liability for each Plan used to calculate the net February 9, 2022
FY 2020-21 ACFR

pension liability was determined by an actuarial valuation as of June 30, 2019 rolled forward to June 30, 2020 using standard update procedures. The City’s proportion of the net pension liability was 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 net position as a percentage of the total pension liability for both Plans is 75.10%.

More detailed information regarding the implementation of GASB 68 can be found in the following sections of the ACFR:

1. Note 6, City Employees Retirement Plan – Pension Plans, beginning on page 63

2. Schedule of Proportionate Share of the Net Pension Liability on page 90

3. Schedule of Plan Contributions on page 91
GASB Statements Regarding Other Post-Employment Benefits (OPEB) During the fiscal year ended June 30, 2018, the City implemented GASB Statement No. 75 (GASB 75), Accounting and Financial Reporting for Post-Employment Benefits other than Pensions which is the “employer” reporting of the plan in its financial statements.

GASB 75 reports a liability in the ACFR on the statement of net position for the OPEB liability which is similar to how net pension liability is reported for pensions.

The primary objective of this statement was to improve accounting and financial reporting by state and local governments for post-employment benefits other than pensions (OPEB). It also improved information provided by state and local governmental employers about financial support for OPEB that is provided by other entities. This Statement replaced the requirements of Statements No. 45, Accounting for Financial Reporting by Employers for Post-Employment Benefits other than Pensions, as amended, and No. 57, OPEB Measurements by Agent Employers and Agent Multiple-Employer Plans.

The City provides OPEB in the form of a modest retiree healthcare benefit. The City’s net OPEB liability was measured as of June 30, 2021, and the total OPEB liability used to calculate the net OPEB liability was determined by an actuarial valuation dated June 30, 2019 that was rolled forward to determine the June 30, 2021 total OPEB liability, based on the actuarial methods and assumptions as explained in Note 7 in the ACFR.

In FY 2018-19, the Council changed its funding policy for the City’s OPEB liability. Before FY 2018-19, the Council would use a portion of a fiscal year’s ending surplus to be placed in the Public Agency Retirement Services (PARS) Section 115 irrevocable benefit trust (Trust) for OPEB. As part of the adoption of the FYs 2019-20 and 2020-21 budgets, both approved by Council on June 12, 2019, a funding policy was established to fund the OPEB liability.

The total OPEB liability as of June 30, 2021 increased by $50,293 to $3,582,741.

Combined with an increase of $410,273 in the Fiduciary Net Position (FNP), or monies held by the PARS Trust, the City’s Net OPEB Liability (NOL) realized a total reduction of $359,980 from FY 2019-20 to FY 2020-21 as shown in the following table:

February 9, 2022
FY 2020-21 ACFR

Net OPEB Liability
06/30/2020 6/30/2021 Difference
Total OPEB Liability (TOL) $ 3,532,448 $ 3,582,741 $ 50,293 Fiduciary Net Position (FNP) 848,608 1,258,881 410,273
Net OPEB Liability (NOL) $ 2,683,840 $ 2,323,860 $(359,980) Funded Status (FNP/TOL) 24.0% 35.1%
Discount Rate 6.00% 6.00%
More detailed information regarding the implementation of GASB 75 can be found in the following sections of the ACFR:

1. Note 7, Other Post-Employment Benefits, beginning on page 68

2. Schedule of Changes in Net OPEB Liability and Related Ratios on page 94

3. Schedule of Plan Contributions on page 95

4. Schedule of Investment Returns on page 96
Fund Balance
In FY 2010-11, the City adopted the provisions of GASB Statement No. 54 (GASB 54), Fund Balance and Governmental Fund Type Definitions. GASB 54 changed how Fund Balances were previously reported in fiscal years prior to FY 2010-11 and has established Fund Balance classifications based largely upon the extent to which a government is bound to observe constraints imposed upon the use of the resources reported in governmental funds. The Governmental Fund statements conform to this classification and information regarding Fund Balances can be found in Note 12 on page 79 of the ACFR.

Also included in Note 12 on page 80 of the ACFR is the General Fund GASB 54 Fund Balance Classifications, which provides detail about the General Fund Balance categories. The Unassigned category amount of $7,138,002 includes the Fund Balance amount of $(1,993,423) for the Real Property Acquisition Fund. This amount reflects the balance due to the Sanitation Fund of $2,054,056, plus $60,633 of cash available for future property acquisitions.

The loan balance from the Sanitation Fund is reported as a liability on the General Fund’s balance sheet as an “Advances from Other Funds”. The loan payable to the Sanitation fund was made at an annual interest rate of 2.78% for seven years with annual payments equal to $445,699. As payments are made each year to the Sanitation Fund, the loan amount will decrease and the Fund Balance amount in the Real Property Acquisition Fund will increase and eventually be zero when the loan is fully paid in FY 2025/26.

February 9, 2022
FY 2020-21 ACFR

Fund Activity
General Fund
The General Fund had the following activity for FY 2020-21:

Total Revenues $ 23,041,752
Total Expenditures (20,666,776)
Other Financing
Sources -
Other Financing
(Uses) (283,100)
Net Change in Fund Balance $ 2,091,876
Fund Balance
Beginning of Year 15,454,078
End of Year $ 17,545,954
Non-Spendable 54,212
Restricted 3,245,475
Committed 901,576
Assigned 6,206,689
Unassigned 7,138,002
Fund Balance-June 30, 2021 $ 17,545,954
The net change in the General Fund’s fund balance from FY 2019-20 to FY 2020-21 is $2,091,876 using the GASB 54 fund balance classifications as reflected in the following table:
06/30/20 06/30/21 Difference
Non-Spendable $ 52,665 $ 54,212 $ 1,547
Restricted 2,422,056 3,245,475 823,419
Committed 1,179,507 901,576 (277,931)
Assigned 6,349,702 6,206,689 (143,013)
Unassigned GF 7,956,885 9,131,425 1,174,540
Real Property Acquis (2,506,737) (1,993,423) 513,314
Total Unassigned 5,450,148 7,138,002 1,687,854
Total General Fund $ 15,454,078 $ 17,545,954 $ 2,091,876 February 9, 2022
FY 2020-21 ACFR

The General Fund’s revenue, expenditures, and fund balance as reported in the ACFR includes the City’s internal service funds. The net change in the General Fund’s fund balance, including the internal service fund designations, is reflected in the following table:
06/30/20 06/30/21 Difference
General Fund $ 10,466,843 $ 11,642,931 $ 1,176,088
Self-Insurance 923,644 618,490 (305,154)
Workers Comp 539,911 696,923 157,012
Asset Replacement 2,392,250 2,391,099 (1,151)
Facilities Replacement 735,493 741,773 6,280
OPEB/Pensions 2,902,674 3,448,161 545,487
Real Property Acquisition (2,506,737) (1,993,423) 513,314 Total General Fund $ 15,454,078 $ 17,545,954 $ 2,091,876 Other Governmental Funds
The Special Revenue Funds, Capital Improvement Funds, and Debt Service Funds had the following combined activity for FY 2020-21:

Total Revenues $ 3,778,172
Total Expenditures (3,730,203)
Other Financing Sources -
Other Financing (Uses) 283,100
Net Change in Fund Balance $ 331,069
Fund Balance
Beginning of Year 7,761,442
End of Year $ 8,092,511
Non-Spendable -
Restricted 10,928,273
Committed -
Assigned -
Unassigned (464,267)
Fund Balance-June 30, 2021 $ 10,464,006
The Proprietary Funds, which include Sanitation and Solana Energy Alliance, had the following activity for FY 2020-21 as shown on the following page:

February 9, 2022
FY 2020-21 ACFR

Total Revenues $ 9,280,616
Total Expenditures (7,001,401)
Non Operating Revenues 235,627
Non Operating Expenditures (841,891)
Change in Net Position $ 1,672,951
Net Position
Beginning of Year 46,402,836
End of Year $ 48,075,787
Net Position
Net Investment in Capital Assets 11,185,890
Restricted for Debt Service -
Unrestricted 36,889,897
Net Position-June 30, 2021 $ 48,075,787
The Management’s Discussion and Analysis Section of the ACFR provides a more indepth view of the City’s current financial health. The Statement of Auditing Standards (SAS) No. 115, Communication of Internal Control Related Matters Identified in an Audit (Attachment 2), received from the auditor’s states that there were no material instances of noncompliance, no material weaknesses in internal controls, and no reportable conditions.

In SAS No. 114, the Auditor’s Communication with Those Charged with Governance (Communication) (Attachment 3) regarding their responsibilities under auditing standards generally accepted in the United States of America and Government Auditing Standards, the auditors reported on the implementation of various GASBs, among other findings.

The City’s audit was conducted in conformity with Generally Accepted Auditing Standards (GAAS). These are the standards that a CPA must follow when auditing financial statements. In an independent audit, the CPA expresses an opinion as to whether the financial statements present fairly the financial position and results of operations for the year ended. The Fiscal Year 2020-21 audit report contains this unmodified opinion.

The City was proud to accept the Certificate of Achievement for Excellence in Financial Reporting from the Government Finance Officers Association for the ACFR for the fiscal year ended June 30, 2020. Staff is confident that this report will again earn this distinction.

CEQA COMPLIANCE STATEMENT:

Not a project as defined by CEQA.

FISCAL IMPACT:

None with this action.

February 9, 2022
FY 2020-21 ACFR

WORK PLAN:

N/A
OPTIONS:
• Approve Staff recommendation.
• Provide alternative direction.

DEPARTMENT RECOMMENDATION:

Staff recommends that the City Council:

1. Accept and file the City of Solana Beach Annual Comprehensive Financial Report (ACFR) for the fiscal year July 1, 2020 – June 30, 2021.

2. Accept and file the Communication of Internal Control Related Matters Identified in an Audit letter.

3. Accept and file The Auditor’s Communication with Those Charged with Governance letter.

CITY MANAGER’S RECOMMENDATION:

Approve Department Recommendation.
_________________________
Gregory Wade, City Manager
Attachments:

1. ACFR Fiscal Year Ended June 30, 2021

2. Communication of Internal Control Related Matters Identified in an Audit letter

3. The Auditor’s Communication with Those Charged with Governance letter

S O L A N A B E A C H

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CITY OF SOLANA BEACH, CALIFORNIA

ANNUAL COMPREHENSIVE FINANCIAL REPORT
FOR THE FISCAL PERIOD ENDED JUNE 30, 2021

TABLE OF CONTENTS
Page
Number

INTRODUCTORY SECTION
Letter of Transmittal ............................................................................................................................ i GFOA Certificate of Achievement ..................................................................................................... x Principal Officials ............................................................................................................................... xi Organizational Chart ......................................................................................................................... xii

FINANCIAL SECTION
INDEPENDENT AUDITORS' REPORT ................................................................................................... 1 MANAGEMENT'S DISCUSSION AND ANALYSIS ................................................................................. 5

BASIC FINANCIAL STATEMENTS
Government-Wide Financial Statements:

Statement of Net Position ................................................................................................................ 23 Statement of Activities ..................................................................................................................... 24 Fund Financial Statements:

Balance Sheet - Governmental Funds ............................................................................................ 30 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position ...................................................................................................... 31 Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds ..................................................................................................... 32 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the
Statement of Activities ..................................................................................................................... 33 Statement of Net Position - Proprietary Funds ................................................................................ 37 Statement of Revenues, Expenses and Changes in Fund Net Position - Proprietary Funds ............................................................................................................ 38 Statement of Cash Flows - Proprietary Funds ................................................................................ 39 Statement of Fiduciary Net Position - Fiduciary Funds ................................................................... 43 Statement of Changes in Net Position - Fiduciary Funds ............................................................... 44 Notes to Financial Statements ............................................................................................................ 47

CITY OF SOLANA BEACH, CALIFORNIA

ANNUAL COMPREHENSIVE FINANCIAL REPORT
FOR THE FISCAL PERIOD ENDED JUNE 30, 2021

TABLE OF CONTENTS
Page
Number

REQUIRED SUPPLEMENTARY INFORMATION
Budgetary Comparison Schedules:

General Fund ............................................................................................................................ 88 Transnet Fund ........................................................................................................................... 89 Miscellaneous Employees Pension Plan:

Schedule of Proportionate Share of the Net Pension Liability .................................................. 90 Schedule of Employer’s Contributions ...................................................................................... 91 Safety Employees Pension Plan:

Schedule of Proportionate Share of the Net Pension Liability .................................................. 92 Schedule of Employer’s Contributions ...................................................................................... 93 Retiree Healthcare Plan:

Schedule of Changes in Net OPEB Liability and Related Ratios ............................................. 94 Schedule of Employer’s Contributions ...................................................................................... 95 Schedule of Investment Returns ............................................................................................... 96 Notes to Required Supplementary Information .............................................................................. 97

COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES
Combining Balance Sheet - Nonmajor Governmental Funds ....................................................... 102 Combining Statement of Revenues, Expenditures and
Changes in Fund Balances - Nonmajor Governmental Funds ...................................................... 108 Budgetary Comparison Schedules:

Special Revenue Funds:

Gas Tax ............................................................................................................................ 114 Municipal Improvement Districts ....................................................................................... 115 Lighting District ................................................................................................................. 116 COPS ................................................................................................................................ 117 Public Safety ..................................................................................................................... 118 Fire Mitigation ................................................................................................................... 119 Transportation Development Act Fund ............................................................................. 120 CDBG ............................................................................................................................... 121 Coastal Area Business/Visitors Assistance and Enhancement ....................................... 122 Boating & Waterways ....................................................................................................... 123 Miscellaneous Grants ....................................................................................................... 124 Developer Pass-Thru ........................................................................................................ 125 Housing ............................................................................................................................. 126 Camp Programs ............................................................................................................... 127 SB1 Streets & Roads ........................................................................................................ 128

CITY OF SOLANA BEACH, CALIFORNIA

ANNUAL COMPREHENSIVE FINANCIAL REPORT
FOR THE FISCAL PERIOD ENDED JUNE 30, 2021

TABLE OF CONTENTS
Page
Number
COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES (Continued) Capital Projects Funds:

City CIP ............................................................................................................................. 129 Sand Replenishment/Retention and Coastal Access ....................................................... 130 Debt Service Funds:

City Debt Service .............................................................................................................. 131 Combining Statement of Net Position - All Custodial Funds ......................................................... 134 Combining Statement of Changes in Net Position -
All Custodial Funds ........................................................................................................................ 135

STATISTICAL SECTION
Net Position by Component ........................................................................................................... 142 Changes in Net Position ................................................................................................................ 144 Fund Balances – Governmental Funds ......................................................................................... 146 Changes in Fund Balances – Governmental Funds ...................................................................... 148 Assessed Value and Estimated Actual Value of Taxable Property ............................................... 152 Direct and Overlapping Property Tax Rates .................................................................................. 154 Principal Property Tax Payers ....................................................................................................... 157 Property Tax Levies and Collections ............................................................................................. 158 Ratios of Outstanding Debt by Type.............................................................................................. 163 Direct and Overlapping Governmental Activities Debt .................................................................. 164 Legal Debt Margin Information ...................................................................................................... 165 Pledged Revenue Coverage ......................................................................................................... 166 Demographic and Economic Statistics .......................................................................................... 168 Top 25 Employers – San Diego County ........................................................................................ 169 Full-Time Equivalent City Employees by Function/Program ......................................................... 172 Operating Indicators by Function/Program .................................................................................... 174 Capital Asset Statistics by Function/Program ............................................................................... 176

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CITY OF SOLANA BEACH FAX (858) 792-6513 / (858) 755-1782 635 SOUTH HIGHWAY 101 • SOLANA BEACH • CALIFORNIA 92075-2215 • (858) 720-2400 January 31, 2022

To the Honorable Mayor, Members of the City Council, and Citizens of Solana Beach:

It is with great pleasure that we present to you the City of Solana Beach (City) Annual Comprehensive Financial Report (ACFR) for the Fiscal Year ended June 30, 2021.

This year’s report was prepared by the City’s Finance Department in conformity with Generally Accepted Accounting Principles (GAAP) and has been audited in accordance with Generally Accepted Auditing Standards (GAAS) by a firm of licensed Certified Public Accountants. The report consists of management representations concerning the finances of the City. Consequently, responsibility for both the accuracy of the data and the completeness and fairness of the presentation, including all disclosures, rests with the City. To the best of our knowledge and belief, the enclosed information is accurate in all material respects and is reported in a manner designed to present fairly the financial position of the City. All disclosures necessary to enable an understanding of the City’s financial activities have been included.

The ACFR includes the financial activity for all funds of the City. The City provides a wide range of services including planning; public works; engineering; maintenance of streets, parks and public facilities; community services and recreation; fire and marine safety; sanitation; community choice aggregation; and general administrative activities. Contracted services include building services through a third-party consultant, law enforcement with the San Diego County Sheriff and animal control with the San Diego Humane Society.

Internal Controls
The management of the City is responsible for establishing and maintaining an internal control structure designed to ensure that the assets of the government are protected from loss, theft, or misuse, and to ensure that adequate accounting data is compiled to allow for the preparation of financial statements in conformity with GAAP. The internal control structure is designed to provide reasonable, but not absolute, assurance that these objectives are met.

The concept of reasonable assurance recognizes that (1) the costs 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.

As a recipient of State, County, and Federal financial resources, the City also is responsible for ensuring that an adequate internal control structure is in place to ensure compliance with applicable laws and regulations related to those programs. The internal control structure is subject to periodic evaluation by the management of the City. i
ii
Annual Audit
Lance, Soll and Lunghard, LLP, appointed by the City Council, has audited the City’s financial statements. The goal of the independent audit is to provide reasonable assurance that the financial statements of the City for the fiscal year ended June 30, 2021, are free of material misstatements. As part of the City’s annual audit, reviews are made to determine the adequacy of the internal control structure as well as to determine that the City has complied with applicable laws and regulations.

The results of the City’s annual audit for the fiscal year ended June 30, 2021, provided no instances of material weaknesses in the internal control structure and no violations of applicable laws and regulations. The independent auditor concluded there was a reasonable basis for rendering an unmodified opinion and the City’s financial statements are fairly presented in conformity with GAAP. The independent auditor’s report is presented as the first component of the financial section of this report.

Management’s Discussion and Analysis (MDA)
This letter of transmittal is designed to complement the Management’s Discussion and Analysis (MDA) and should be read in conjunction with it. The MDA provides “financial highlights” and interprets the financial reports by analyzing trends and by explaining changes, fluctuations, and variances in the financial data. In addition, the MDA is intended to disclose any known significant events or decisions that affect the financial condition of the City. The City’s MDA can be found immediately following the report of the independent auditors.

Government Profile
The City was incorporated on July 1, 1986, under the general laws of the State of California and is home to a population of 13,838 residents per the State of California Department of Finance. Included within the City’s financial statements is the financial information of the Solana Beach Public Facilities Corporation. The City is considered the primary government and the Public Facilities Corporation is a component unit. Additionally, since the governing boards of the City and the component unit are the same, the financial statements of the City and the component unit are blended.

The Solana Beach Public Facilities Corporation was incorporated on July 25, 1990, as a nonprofit public benefit corporation duly organized and existing under the Nonprofit Public Benefit Corporation Law. Its purpose is to benefit the City by providing financing for the planning, development, acquisition, construction, improvement, extension, repair, and renovation of public works projects, public facilities, furnishings, and equipment for use by the City.

The City is a coastal community encompassing approximately 3.4 square miles and is located twenty-one miles north of the City of San Diego’s downtown district. It is bordered to the North and South by the cities of Encinitas and Del Mar, respectively; to the East by the County San Diego; to the southeast by the City of San Diego; and by the Pacific Ocean to the West.

The City is a general law city that operates under the Council-Manager form of government. iii
The City Council (Council) is comprised of four Council members elected within separate Council Districts to staggered four-year terms of office. The Mayor is elected at large to a four-year term and the Deputy Mayor is selected by the Council from among its four Councilmembers to serve a one-year term. The Council acts as the legislative and policymaking body of the City, enacting all laws and directing such actions as required providing for the general welfare of the community.

The City Manager, appointed by the Council, serves as the Chief Executive Officer and is responsible to the Council for the proper administration of all City affairs and for the implementation of all policies established by the Council. The City Attorney is the only other position appointed by the Council. All other department heads and employees are appointed by the City Manager.

Commissions play an important role in the governmental structure of Solana Beach. They provide many opportunities for citizens to participate in the affairs of the City. These Advisory Commissions assist in the performance of studies and the issuance of recommendations on various matters of concern to the Council.

The Advisory Commissions are the following:

Budget & Finance Commission
Climate Action Commission
Parks & Recreation Commission
Public Arts Commission
View Assessment Commission
Budgetary Process and Controls
The process of adopting a budget for the City is generally a six-month process beginning in late December and ending in June when the Council adopts the budget and appropriates funds necessary for the City to provide services to its residents.

The process is all-inclusive as department directors work with the City Manager and representatives of the Finance Department to discuss departmental requests relative to the City’s available resources.

The City’s overall objectives and goals, along with the economic outlook, serve as a platform for the proposed budget that is distributed to the Council, and the Budget and Finance Commission, for preliminary review and analysis in preparation of public workshops and hearings. The public workshops and hearings are held to facilitate discussions of items contained within the proposed budget and to allow the citizenry to participate in the budget process.

In June 2019, the City Council approved a two-year budget for Fiscal Years (FY) 2019/20 and 2020/21. The same process was followed in developing this two-year budget and, as the budget is amended during this two-year budget cycle, budget adjustments are brought to the City Council for review and approval. The Fiscal Year 2020/21 portion of the two-year budget was amended in July 2020 mainly due to the impacts of COVID on City resources. iv

In addition to internal controls, the City maintains budgetary controls. The objective of these budgetary controls is to ensure compliance with legal provisions embodied in the annual appropriated budget approved by the Council. Activities of the General, Special Revenue, Debt Service, and Capital Projects Funds are included in the annual appropriated budget.

The budget is arranged by fund, function, and department and is presented to the Council by the City Manager and Finance Director. The budget is then adopted annually by the Council prior to the beginning of the financial year and serves as the foundation for the City’s financial planning and control. Department directors may make transfers of appropriations within their own budget units’ departments with City Manager approval. The City budget is reviewed and is periodically adjusted at the middle of the fiscal year and at the end of the fiscal year. These adjustments are approved by the Council.

The City also maintains an encumbrance accounting system as one technique of accomplishing budgetary control. The adopted budget for Fiscal Year 2020/21 was prepared in accordance with Generally Accepted Accounting Principles.

As demonstrated by the statements and schedules included in the financial section of this report, the City continues to meet its responsibility for sound financial management.

Economic Condition and Outlook
Information presented in the City’s financial statements is best understood within the context of our broader economic conditions. Fundamentals of the national economy have gained strength as the economy continues to rebound from the beginning stages of the COVID-19 pandemic. Based on the most recent estimates from the Bureau of Economic Analysis, Real Gross Domestic Product (GDP) increased at an annual rate of 2.3% in the third quarter of 2021 after increasing 6.7% in the 2nd quarter. The national unemployment rate continued to decline from its highs in 2020. The unemployment rate was estimated at 4.2% in November 2021, down from 6.7% in November 2020.

In November, the U.S. Bureau of Labor Statistics (BLS) reported the Consumer Price Index for All Urban Consumers (CPI-U) increased 0.8% on a seasonally adjusted basis after rising

0.9% in October. Over the last 12 months, the All Items index increased 6.8% before seasonal adjustment. Lead by food and energy increases, the CPI-U produced the largest 12-month increase since the period ending June 1982. According to the Federal Open Market Committee (FMOC), the elevated inflation is largely reflecting factors that are expected to be transitory. Supply and demand imbalances related to the pandemic and the reopening of the economy have contributed to sizable price increases in some sectors. Overall financial conditions remain accommodative, in part reflecting policy measures to support the economy and the flow of credit to U.S. households and businesses.

Local Economy
Solana Beach is home to citizens who enjoy the benefits of a coastal community that is within close proximity to the City of San Diego. The local beaches are a big attraction to both residents and non-residents. The City is comprised mainly of single-family homes and v
condominiums with retail, office, and light industrial uses and service entities providing a tax base for the City.

As a somewhat suburban community, Solana Beach's economic base is linked primarily to the economy of the greater San Diego region. In particular, the greater San Diego economic base sustains the City’s residential and industrial facilities. The local economy is primarily based on small to medium sized retail establishments and specialty stores selling general merchandise, furniture, arts and crafts, clothing, food, and gasoline. Local economic generators such as vacation tourism support a significant portion of the City’s commercial base.

The United States Bureau of Labor Statistics (BLS) reported the San Diego region’s unemployment rate was 4.6% in November down from 6.8% in November 2020. The region’s unemployment rate remains lower than California’s unemployment rate of 6.9%, but higher than the national unemployment rate of 4.2%.

Solana Beach housing prices have continued to climb. Low mortgage rates and low inventory of available homes has fueled price growth. According to the San Diego Association of Realtors, the median home price in Solana Beach in November was $1.64 Million, up 28% from the year prior. The San Diego region’s median home price was $829,000 in November 2021, an increase of 18% as compared to the same month in 2020.

On July 12, 2021, Governor Gavin Newsom signed a $262.5 billion budget for the 2021/22 fiscal year, an increase of 23 percent from the adopted FY 2020/21 budget. The state budget includes a $196.4 Billion General Fund, a $49.5 billion or 34% increase, as compared to the adopted FY 2020/21 budget appropriations. Much of the increases are due to COVID related budget reductions in the FY 2020/21 adopted budget.

Long-Term Financial Planning
Solana Beach’s conservative fiscal policies have helped the City build and maintain a healthy reserve and management will continue to hold costs in line with available resources.

General Fund property taxes have been, and continue to be, the highest revenue generator for the City. Sales tax is the City’s second largest revenue source. Property Taxes in FY 2020/21 increased $448,140 to $8,748,270, or 5.4%, as compared to the prior year. However, sales tax receipts increased $397,760 to $3,291,805, or 12%, mainly due to the economic impact of COVID-19 in the prior year.

Overall, the City’s General Fund revenues increased by $303,692, or 1.34%, from $22,738,060 in FY 2019/20 to $23,041,752 in FY 2020/21.

For FY 2021/22, budgeted property taxes are expected to increase as compared to actual amounts received for the prior fiscal year. Sales tax is also projected to realize an increase as the local economy continues to rebound from the pandemic.

Total General Fund revenues, net of internal service charges, are budgeted at $22,694,100 in FY 2021/22. It is the City’s goal not to rely on General Fund reserves to operate the City vi
annually. The General Fund budget for FY 2021/22 was adopted on June 23, 2021. The adopted budget resulted in a projected $1,555,440 surplus for FY 2021/22.

Relevant Financial Policies
The City of Solana Beach has financial policies that help guide it during the preparation of the annual budget.

One such policy is the 17% reserve requirement discussed in the previous section. This policy, as in the adoption of the FYs 2019/20 and 2020/21 Budgets, is one that has been continuously adhered to by Council.

The Asset Replacement Reserve Fund is used to provide for the replacement of the City’s existing equipment, vehicles, computers, and furnishings and the City’s financial policy is to annually budget funds to this Reserve. During the FYs 2019/20 and 2020/21 budget process, the Council again ensured that funds were appropriated to maintain adequate reserves in the Asset Replacement Fund.

Additionally, beginning with the budget cycle for FY 2014/15, the City established an infrastructure replacement reserve to ensure that funds are available in the future for the replacement of buildings and improvements. Through FY 2020/21, the Council has approved $850,000 to this reserve fund. This is net of the $150,000 reduction in the amended FY2020/21 Budget.

Cash Management Policies and Practices
Cash resources of the individual funds are combined to form a pool of cash and investments.

Cash temporarily idle during the year was invested primarily with Chandler Asset Management and also with the Local Agency Investment Fund (LAIF) consistent with the City’s Investment Policy.

The City’s longstanding Investment Policy was amended by the Council on February 10, 2016, and provides the City more flexibility to invest its excess funds to provide safety to ensure the preservation of capital in the portfolio, provide sufficient liquidity for cash needs, and to realize a market rate of return consistent with the investment program while staying within the requirements of California Government Code Section 53601.

The City’s Investment Policy is designed to maximize the productive use of assets entrusted to its care and to invest and manage those funds wisely and prudently. Criteria for selecting investments and the order of priority are: (1) safety (2) liquidity and (3) yield. The basic premise underlying the City’s Investment Policy is to ensure that money is safe, always available, and earning the highest and best returns.

Investment income includes appreciation/depreciation in the fair market value of investments (FMV). The total investment income for all funds for the fiscal year was $759,560 ($808,013 investment income received minus $48,453 loss on the FMV), a decrease of $746,060 from the prior fiscal year’s amount of $1,505,620 ($870,880 investment income received plus $634,740 gain on the FMV).
vii
Major Projects and Financial Planning
Marine Safety Center Renovations
The Marine Safety Center (MSC) at Fletcher Cove was constructed in or around the 1940s and is showing signs of its age. As part of the FY 2015/16 Adopted Budget, funding was allocated to perform a needs assessment and feasibility study to determine the best course of action for the renovation/replacement of the existing facility.

To accomplish this task, a Professional
Services Agreement with Stephen Dalton
Architects (SDA) was approved at the
March 23, 2016 City Council meeting.

During FY 2016/17, Staff worked with SDA
on the preparation of the Fletcher Cove
MSC Feasibility/Needs Assessment Study.

The results of the Study indicate that nearly
all building components are degraded and
are past their useful lifespan. Spatially, the
current building layout does not meet the
functional needs of the Lifeguards.

To continue with this task, a Professional Services Agreement with Domus Studios Architects was approved at the October 24, 2018 City Council meeting. During FY 2019/20, Staff worked with domus on the preparation of preliminary design plans for the Fletcher Cove MSC.

A community meeting was held in February 2019 and presentations occurred at Council meetings in November 2019 and October 2020. At the November 2019 Council meeting, three design options were presented and Council directed Staff to pursue the above-ground option. At the October 2020 Council meeting, a refined version of the above-ground option was presented. A total of $450,000 has been appropriated in the FY 2021/22 budget for design and engineering for the project.

During the past fiscal year, in collaboration with the City Staff and following City Council’s direction, the consultant team continued the design work on the preferred design options.

Staff is currently working on story poles plans in preparation for the next community outreach efforts.

La Colonia Park Improvements
In FY 2006/2007, a community based La Colonia Park Needs Assessment Advisory Committee developed recommendations for improvements throughout La Colonia Park including ADA Transition Plan recommendations. The City completed the conceptual design for the park improvements in FY 2009/2010 and preliminary design of the park during FY 2010/2011.

With the City’s purchase of the property immediately north of the new Skate Park, analysis will need to be made on how to incorporate the property into the existing park. In FY 2021/22 the City has budgeted $479,000 to design and construct the new Tot Lot and renovate the viii
playground.

Staff is currently working with the City’s
consultant, Van Dyke Architects, on amending
the La Colonia Park Master Plan to incorporate
the recently purchased parcel to the north of the
existing Park. Additionally, the City is developing
design options for reconstruction of the existing
playground at the La Colonia Park. As the City’s
workplan includes renovation of the Fletcher
Cove playground, and in an effort to take
advantage of the economy of scale during
construction, the design team is concurrently
working on design options for replacement of the
Fletcher Cove Park playground equipment.

Santa Helena Neighborhood Trail
In FY 2019/20, a Conceptual Design of the project was developed that would reduce the pavement width on Santa Helena, from Sun Valley Road to the trail head at the San Elijo Lagoon and use the additional space for traffic calming improvements and a neighborhood trail. A focus group meeting was held with representatives from several local HOAs, community members and BikeWalkSolana. The FY 2021/22 budget has $70,000 appropriated for community outreach and engineering design for the project. Staff Negotiated a Professional Services Agreement with M.W. Peltz and Associate for community engagement and preparation of final plans, estimate, and specifications. In compliance with Covid-19 protocol, a virtual community meeting was held in October 2021. Constructive recommendations and feedback were received. The design team is currently working on refining the concept plans in preparation for additional community outreach and presentation to the City Council.

Lomas Santa Fe Corridor Project
The project study area for the Lomas Santa Fe (LSF) Drive Corridor Project extends from Sierra Avenue on the west side of Highway 101 to Highland Drive at the City’s eastern boundary. The City’s goal for the Lomas Santa Fe
Corridor Project is to design physical improvements
that could be constructed to improve the community
character, safety, walkability, bike ability, and
circulation along this key east-west arterial through the City of Solana Beach. With the variation in character
along the corridor, the Project will evaluate feasible
improvements that address transportation
improvements that integrate with the surrounding land
use, activity centers and community character along
the Corridor.

During the past fiscal year, work continued on Phase III of the project which is developing design elements that were shared with the community for feedback. Phase III of the project ix
is for final design of the improvements to LSF and has been funded primarily through a grant from SANDAG. Some of the elements are being designed as part of Phase III include a multiuse path on the north side of LSF, striping and signal improvements, added parking, landscaping, and other items intended to slow down traffic and increase use of the corridor by pedestrians and bicycles. A Community Workshop was held in October 2019 and the project was presented to the City Council for further direction in October 2021. All recommendations from the City Council were incorporated into the design plans and specifications. The project was successfully submitted to SANDAG in December 2021 in compliance with the City’s Active Transportation Grant Agreement.

Acknowledgments
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 Solana Beach for its CAFR for the fiscal year ended June 30, 2020. This was the eighteenth year in the past nineteen years that the City has received this award. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized comprehensive annual financial report. This report must satisfy both generally accepted accounting principles and applicable legal requirements.

A Certificate of Achievement is valid for a period of one year only. We believe that our current comprehensive annual financial report continues to meet the Certificate of Achievement program’s requirements and we are submitting it to GFOA to determine its eligibility for another certificate.

The preparation of the Comprehensive Annual Financial Report in accordance with the GASB 34 financial reporting model was made possible by the dedicated work of the Finance Department staff. Each member of the staff consisting of Catherine Wong, Kyle Koszewnik, Jill Thayer, and Amanda Sither has our sincerest appreciation for their contributions made in the preparation of this report. We would also like to thank the Mayor and Council for their continued support for maintaining the highest standards of professionalism in the management of the City’s finances.

Respectfully submitted, Respectfully submitted,

Gregory Wade Ryan Smith
City Manager Finance Director/City Treasurer
Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Solana Beach
California
For its Comprehensive Annual
Financial Report
For the Fiscal Year Ended
June 30, 2020
Executive Director/CEO
x
•
~ p. ~

CITY OF SOLANA BEACH

LIST OF OFFICIALS AND ADVISORY BODIES

CITY COUNCIL

LESA HEBNER
Mayor

KRISTI BECKER
Deputy Mayor
JEWEL EDSON KELLY HARLESS DAVID A. ZITO
Council Member Council Member Council Member

ADVISORY COMMISSIONS
Budget & Finance Commission
Climate Action Commission
Parks & Recreation Commission
Public Arts Commission
View Assessment Commission

CITY ADMINISTRATION

GREGORY WADE
City Manager
Dan King, Assistant City Manager
Johanna Canlas, City Attorney
Pouneh Sammak, Human Resources Director
Ryan Smith, Finance Director/City Treasurer
Mohammed Sammak, Director of Public Works/City Engineer Joseph Lim, Director of Community Development
Angela Ivey, City Clerk
Michael Manriquez, Information Technology Manager
xi

CITY OF SOLANA BEACH
Organizational Chart
Fiscal Year 2020-2021
General Government
Administration &
Support Services
- City Clerk - Community - Law Enforcement - Engineering - Community - Legal Services Development - Fire - Environmental Services - City Manager's Office - Code & Parking - Animal Control Services - Recreation - Finance Enforcement - Disaster - Street Maintenance
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xii

Lance, Soll & Lunghard, LLP 203N.BreaBlvd.,Suite 203 Brea,CA92821 Phone: 714.672.0022 INDEPENDENT AUDITORS’ REPORT
To the Honorable Mayor and Members of the City Council
City of Solana Beach, California
Report on the Financial Statements
Opinions
We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Solana Beach, California, (the “City”) as of and for the year ended June 30, 2021, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents.

In our opinion, the 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 as of June 30, 2021, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial 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 audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of these 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.

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 twelve months beyond the date of the financial statements.

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To the Honorable Mayor and Members of the City Council
City of Solana Beach, California
Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. 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.

Other Reporting Responsibilities
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis; the budgetary comparison schedules for the General Fund and Transnet Fund; the schedules of proportionate shares of the net pension liabilities; the schedule of changes in net other post-employment benefits (OPEB) liability and related ratios; the schedules of employer’s contributions; and the schedule of investment returns 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 auditing standards generally accepted in the United States of America, 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. 2 Ls~ ....
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To the Honorable Mayor and Members of the City Council
City of Solana Beach, California
Report on Summarized Comparative Information
We have previously audited the City’s 2020 financial statements, and we expressed an unmodified audit opinion on those audited financial statements in our report dated November 25, 2020. In our opinion, the summarized comparative information presented herein as of and for the year ended June 30, 2020, is consistent, in all material respects, with the audited financial statements from which it has been derived.

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 and individual fund financial statements and 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 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 auditing standards generally accepted in the United States of America. In our opinion, the combining and individual fund financial statements and 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 section and statistical section but does not include the basic financial statements and our auditor’s report thereon. Our opinions on the financial statements does 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 financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the 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.

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated January 18, 2022, on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, 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.

Brea, California
January 18, 2022
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4 MANAGEMENT’S DISCUSSION AND ANALYSIS
As management of the City of Solana Beach (City), we offer readers of the City’s financial statements this narrative overview and analysis of the financial activities of the City for the fiscal year ended June 30, 2021 (Fiscal Year (FY) 2021). It should be read in conjunction with the accompanying transmittal letter beginning on page i and the accompanying basic financial statements.

FINANCIAL HIGHLIGHTS
 The City’s net position increased to $87,556,725, or by $3,310,854, as a result of FY2021 operations.
 Governmental net position equaled $39,480,938.
 The total revenues from all sources were $37,419,385.  The total cost of all City programs was $34,108,531.
 The General Fund reported an excess of revenues over expenditures and other financing sources and uses by $2,091,876.
 The General Fund’s actual resources received exceeded the final revenue budget by $1,529,852 while actual expenditures were $1,300,098 less than final budget before other financing sources and uses.

USING THIS ANNUAL REPORT
This annual report consists of a series of financial statements. The three components of the financial statements are:
(1) Government-wide financial statements, which include the Statement of Net Position and the Statement of Activities. These statements provide information about the activities of the City as a whole.
(2) Fund financial statements describe how City services are financed in the short term as well as what resources are available for future spending. Fund financial statements also report the City’s operations in more detail than the government-wide statements by providing information about the City’s most significant funds. (3) Notes to the financial statements.

Reporting the City as a Whole
The Statement of Net Position and the Statement of Activities (Government-wide) A frequently asked question regarding the City’s financial health is whether the year’s activities contributed positively to the City’s overall financial well-being. The Statement of Net Position and the Statement of Activities report information about the City as a whole and about its activities in a way that helps answer this question. These statements include all assets and liabilities using the accrual basis of accounting, which is similar to the accounting used by most private-sector companies. All of the current year’s revenues and expenses are accounted for regardless of when cash is received or paid.
5 These two statements report the City’s net position and changes thereto. Net position, the difference between assets and liabilities, are one way to measure the City’s financial health, or financial position. Over time, increases or decreases in net position are an indicator of whether the financial health is improving or deteriorating. However, it is important to consider other non-financial factors such as changes in the City’s property tax base or condition of the City’s roads to assess accurately the overall health of the City.

The Statement of Net Position and the Statement of Activities present information about the following:
 Governmental activities - All of the City’s basic services are considered governmental activities, including general government, community development, public safety, public works, and community services. Property taxes, transient occupancy taxes, sales taxes, and franchise fees finance most of these activities.
 Proprietary activities/Business type activities - The City charges a fee to customers to cover all or most of the cost of the services provided. The City’s Sanitation system and Solana Energy Alliance, which provides clean energy services to the general public, are reported in this category.
 Component units - The City’s governmental activities include the blending of the City of Solana Beach Public Facilities Corporation, a separate legal entity. Although legally separate, this “component unit” is important because the City is financially accountable for the corporation. A separate component unit financial statement was not issued for the Solana Beach Public Facilities Corporation since it has had no transactions, nor any assets, liabilities or equity over the past three fiscal years.

Reporting the City’s Most Significant Funds
Fund Financial Statements
The fund financial statements provide detailed information about the most significant funds—not the City as a whole. Some funds are required to be established by State law and by bond covenants. However, management establishes many other funds that aid in the administration of resources for particular purposes or to meet legal responsibilities associated with the usage of certain taxes, grants, and other money. The City’s two kinds of funds, governmental and proprietary, use different accounting approaches:
 Governmental funds - Most of the City’s basic services are reported in governmental funds. Governmental funds focus on how resources flow in and out with the balances remaining at year-end that are available for spending. These funds are reported using an accounting method called modified accrual, which measures cash and all other financial assets that can readily be converted to cash. The governmental fund statements provide a detailed short-term view of the City’s general government operations and the basic services it provides. Governmental fund information shows whether there are more or fewer financial resources that can be spent in the near future to finance the City’s programs. We describe the relationship (or differences) between governmental activities (reported in the Statement of Net Position and the Statement of Activities) and 6 governmental funds through the Reconciliation of the Fund Financial Statements to the Government-Wide Financial Statements.

 Proprietary funds - When the City charges customers for the services it provides, these services are generally reported in proprietary funds. Proprietary funds are reported in the same way that all activities are reported in the Statement of Net Position and the Statement of Activities.

The City as Trustee
Reporting the City’s Fiduciary Responsibilities
The City is the trustee, or fiduciary, for certain amounts held on behalf of developers, property owners, and others. These fiduciary activities are reported in separate Statements of Fiduciary Net Position and Changes in Assets and Liabilities. The City is responsible for ensuring that the assets are used for their intended purposes. Therefore, fiduciary activities are excluded from the City’s other financial statements because the assets cannot be used to finance operations.

After the date of the dissolution of the Solana Beach Redevelopment Agency (RDA) on February 1, 2012, the assets and liabilities of the former redevelopment agency were transferred to the Successor Agency to the former Solana Beach RDA (Successor Agency) and are reported in a fiduciary fund (private-purpose trust fund).

THE CITY AS A WHOLE
Our analysis focuses on the net position (Table 1) and changes in net position (Table 2) of the City’s governmental and business activities.
7 The City’s combined net position for the fiscal year ended June 30, 2021 was $87,556,725. The City has chosen to account for its sanitation and community choice aggregation operations in enterprise funds, which are shown as Business Activities on Table 1. The City’s net position for governmental activities increased from $37,843,035 to $39,480,938. The following is an explanation of the governmental activity changes between fiscal years as shown in Table 1:
 Current and other assets increased $2,645,380 or 8.4% primarily due to increased cash and investments and receivables.
 Capital Assets net of depreciation decreased $709,233 or 2.0% mainly due to current year depreciation on existing assets. More information is provided following Table 4.  Long-term liabilities increased by $879,615 mainly due to the increase in net pension liability related to changes in actuarial assumptions.

2021 2020 2021 2020 2021 2020
Assets:
$ 34,206,580 $ 31,561,200 $ 49,566,684 $ 47,750,929 $ 83,773,264 $ 79,312,129 Capital assets, net 34,899,886 35,609,119 17,389,211 18,602,120 52,289,097 54,211,239 Total Assets 69,106,466 67,170,319 66,955,895 66,353,049 136,062,361 133,523,368 Deferred Outflows 3,533,326 3,391,977 199,042 282,142 3,732,368 3,674,119 Liabilities:
25,698,201 24,818,586 17,994,668 18,620,170 43,692,869 43,438,756 Other liabilities 5,790,073 5,858,950 972,935 1,447,374 6,763,008 7,306,324 Total Liabilities 31,488,274 30,677,536 18,967,603 20,067,544 50,455,877 50,745,080 Deferred Inflows 1,670,580 2,041,725 111,547 164,811 1,782,127 2,206,536 Net Position:
26,653,123 26,666,266 11,185,890 12,052,987 37,839,013 38,719,253 Restricted 14,173,748 12,664,581 - 14,173,748 46 12,664,627 Unrestricted (1,345,933) (1,487,812) 36,889,897 34,349,803 35,543,964 32,861,991 Total Net Position $ 39,480,938 $ 37,843,035 $ 48,075,787 $ 46,402,836 $ 87,556,725 $ 84,245,871 Net investment in
capital assets
Table 1
City of Solana Beach Net Position
Governmental
Actvities
Business
Actvities Total
Current and
other assets
Long-term liabilities
outstanding
8 Changes related to Business activities are as follows:
 Current and other assets increased $1,815,755 or 3.8% primarily due to increased cash and investments and receivables.
 Capital Assets net of depreciation decreased $1,212,909 or 6.5% primarily due to the sale of a recycled water pipeline to San Elijo JPA. More information is provided following Table 4.  Other liabilities decreased by $474,439 or 32.8% mainly due to the decrease in accounts payable at year end.

Governmental Activities
The cost of all Governmental activities in FY 2021 was $26,375,978 as shown on Tables 2 and 2.1.

Of this cost, $2,269,672 was paid for by those who directly benefited from the programs; $2,215,495 was subsidized by grants received from other governmental organizations for both capital and operating activities; and $21,890,811 was financed through general City revenues. Overall governmental program revenues, including intergovernmental aid and fees for services were $4,485,167.
9 Items of significance within Table 2 are:

Revenues:
 Operating and Capital grants and contributions increased by a net $701,604 over the prior fiscal year amount due to an increase state and federal grant revenue received including State and County CARES Covid-19 funds.
 Property taxes and other taxes increased by approximately 6.4% or $1,190,370 due to increased revenue from property tax and sales tax.
2020 2020 2020
Revenues:

Program revenues:

Charges for services 2,269,672 $ $ 1,973,694 $ 9,243,320 $ 9,766,536 $ 11,512,992 $ 11,740,230 Operating grants
and contributions 1,913,915 1,168,729 - 1, - 913,915 1,168,729 Capital grants
and contributions 301,580 345,162 - - 301,580 345,162
General revenues:

Property taxes 10,093,847 9,465,402 - 10, - 093,847 9,465,402 Other taxes 9,681,807 9,119,882 - 9, - 681,807 9,119,882 Other 3,753,060 4,718,834 162,184 604,355 3,915,244 5,323,189 Total revenues 28,013,881 26,791,703 9,405,504 10,370,891 37,419,385 37,162,594 Expenses:

General government 5,537,474 4,985,418 - 5, - 537,474 4,985,418 Public safety 13,116,915 12,616,348 - 13, - 116,915 12,616,348 Public works 4,665,830 4,894,915 - 4, - 665,830 4,894,915 Community
development 1,506,502 1,585,952 - 1, - 506,502 1,585,952 Community
services 1,193,256 1,226,910 - 1, - 193,256 1,226,910
Interest and
fiscal charges 356,001 363,326 - - 356,001 363,326
Sanitation - 3,891,241 - 4,221,307 3,891,241 4,221,307
Solana Energy - 3,841,312 - 4,350,085 3,841,312 4,350,085 Total expenses 26,375,978 25,672,869 7,732,553 8,571,392 34,108,531 34,244,261 Increase/(decrease)
in net position 1,637,903 1,118,834 1,672,951 1,799,499 3,310,854 2,918,333 Net position - July 1 37,843,035 36,724,201 46,402,836 44,603,337 84,245,871 81,327,538 Net position - June 30 $ 39,480,938 $ 37,843,035 $ 48,075,787 $ 46,402,836 $ 87,556,725 $ 84,245,871 Table 2
City of Solana Beach Changes in Net Position
Governmental Business Total
Activities Activities
2021 2021 2021
10  Other general revenues decreased by $1,407,945 or 26.4% as compared to the prior fiscal year primarily to decreases in investment income, administrative charges, and camp related transfers.

Expenses:
 General Government expenses increased in FY 2021 by 11.1% or $552,056 from the prior fiscal year primarily due to increased costs in the City’s net Pension liability associated with a change in actuarial assumptions.
 Public Safety increased by 4% or $500,567 due to a combination of increases in the Sheriff’s contract with the County, equipment replacement, and pension costs.  Solana Energy Alliance expenses decreased by $508,773 or 11.7% due to the transition of operations to the Clean Energy Alliance in FY 2021.

Fiscal Year 2021
Governmental Activities
(Graphic representation of Table 2 in percentages)
Net Cost of Governmental Activities
The City’s programs include General Government, Public Safety, Public Works, Community Development, and Community Services. Each programs’ net cost (total cost less revenues generated by the activities) is presented on Table 2.1. The net cost shows the extent to which the City’s general taxes support each of the City’s programs. 11 Investment
Income
4%
Capital Grants
1%
Operating
Grants 7%
Charges for
Services 8%
Sources of Revenue
Property
Taxes 36%
Other Taxes
35%
General Govt,
21%
Public Works,
18%
Interest on LT
Debt, 1%
Comm
Developmnt.
6%
Program Expenses
Comm
Public Safety,
50%
Total resources available during the year to finance governmental operations were $65,856,916 consisting of a net position at July 1, 2020 of $37,843,035, program revenues of $4,485,167, and general revenues of $23,528,714. Total governmental activities during the year were $26,375,978, and as a result, net position increased by $1,637,903 to $39,480,938.

Business Type Activities
Net position of the Proprietary Fund (Business Type activities) at June 30, 2021, as reflected in Table 1, was $48,075,787. As shown in Table 3, amounts paid by users of the Sanitation system and Solana Energy Alliance and other operating revenue were $9,243,320 while the cost of providing all Proprietary (Business Type) activities in FY 2021 was $7,732,553 resulting in a net gain of $1,510,767. With the addition of negative non-operating revenues of $162,184, as shown on Table 2, net position increased by $1,672,951 or 3.6%.

General government $       4,985,418 5,537,474 $       $           205 393,455 $                   $ (5,144,019) $ (4,985,213) Public safety        12,616,348 13,116,915                     946,095 791,551              (11,670,253) (12,325,364) Public works           4,894,915 4,665,830           1,           1,247,879 708,329           (2,957,501) (3,647,036) Community development           1,585,952 1,506,502           1,           1,190,562 082,510           (395,390) (423,992) Community services           1,226,910 1,193,256                        102,844 509,322              (1,124,066) (683,934) Interest on long-term debt              363,326 356,001              ‐                            ‐                            (363,326) (356,001) Totals $     25,672,869 26,375,978 $     4, $       3,487,585 485,167 $       (21,890,811) $   (22,185,284) $ Table 2.1
Net Cost of Governmental Activities
Total Cost Program Net Cost
of Services Revenues of Services
2021 2020 2021 2020 2021 2020
(15,000,000)
(10,000,000)
(5,000,000)
-
5,000,000
10,000,000
15,000,000
Gen Govt Public Safety Public Works
Comm
Development Comm Services Interest
Cost of Services, Program Revenues & Net Cost Governmental Activities
Cost of Services Program Revenues Net Cost
12 I_ - -- ---
■ ■ ■
Governmental Funds
The net change in Governmental Fund Balances are shown below in Table 4:
2021
Revenues:

Taxes, Licenses, Fees
and Intergovernmental 18,174,610 $ 17,017,289 $ 405,974 $ 608,951 $ - $ - $ 3,644,229 $ 2,846,324 $ 22,224,813 $ 20,472,564 $ Charges for Services 1,006,034 1,110,059 - - 70,716 43,215 372,964 115,549 1,449,714 1,268,823 Other 3,861,108 4,610,712 576 6,142 159,709 171,242 (24,002) 290,441 3,997,391 5,078,537 Total Revenues 22,738,060 23,041,752 406,550 615,093 230,425 214,457 3,993,192 3,252,314 27,671,919 26,819,924 Expenditures:

Current 20,159,439 20,096,733 3,251 461 5,265 102,148 2,656,987 1,822,927 22,824,942 22,022,269 Capital Outlay 507,337 291,013 117,579 222,389 609,562 282,589 566,198 896,975 1,800,676 1,692,966 Debt - - 325,105 325,105 - - 349,701 356,639 674,806 681,744 Total Expenditures 20,387,746 20,666,776 445,935 547,955 614,827 384,737 3,572,886 3,076,541 25,300,424 24,396,979 Net Transfers (729,515) (283,100) - - - 100,000 283,100 629,515 - - Net Change in
Fund Balances $ 2,091,876 $ 1,620,799 $ (39,385) $ 67,138 $ (384,402) $ (70,280) $ 703,406 $ 805,288 $ 2,371,495 $ 2,422,945 Table 4
City of Solana Beach Governmental Funds
Changes in Fund Balances
Special Revenue Fund Capital Projects Fund Other Governmental Total Transnet City CIP Funds General Fund 2020 2021 2020 2021 2020 2021 2020 2021 2020
2021 2020 2021 2020 2021 2020
Sanitation 3,891,241 $ 4,221,307 $ 5,676,286 $ 5,588,249 $ 1,785,045 $ 1,366,942 $ Solana Energy Alliance 3,841,312 4,350,085 3,567,034 4,178,287 (274,278) (171,798) Total Business Activities $ 8,571,392 7,732,553 $ 9,243,320 $ 9,766,536 $ 1,510,767 $ 1,195,144 $ of Services Revenue of Services
Table 3
Net Cost of Business Activities
Total Cost Program Net Cost
$(1,000,000)
$‐
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
Sanitation Solana Energy Alliance
Cost of Services, Program Revenues & Net Cost
Business Activities
Fiscal Year 2021
Cost of Services Program Revenues Net Cost
13 ■ ■ ■
The General Fund - Fund Balance increased by $2,091,876 or 13.5% to $17,545,954 from June 30, 2020 to June 30, 2021. This was mainly due to increases in tax revenues and reductions in project related transfers out due to uncertainty surrounding COVID-19. Property Tax revenue increased primarily due to Prop 13 assessment increases of 2% and new assessments from construction and sales. Sales Tax revenues increased from the prior year as the economy rebounded from the COVID-19 lows. The City’s largest business segment, general consumer goods, saw a big jump which reflected a return to in-store shopping as people felt safer with the roll-out of vaccines. Restaurant activity also rebounded in the 4th quarter of FY 2021, with quickservice and casual dining returning to prior year levels. Lead by the increase in the General Fund Balance, the Total Governmental Fund balance increased by 9.3% or $2,371,495 to $28,009,960 from June 30, 2020 to June 30, 2021.

General Fund Budgetary Highlights
Revenues: Actual revenues received were above the final year-end budget by $1,529,852 or

4.1%. Sales Tax revenue was $356,566 higher than the revised budget projections. The increase is primarily attributed to a strong second half of FY 21, as the COVID-19 vaccine roll-out began and was reflected in a return to in-store shopping. Restaurant activity also rebounded in the fourth quarter of FY 21 to prior year levels. Hotel Transient Occupancy Tax revenue was $103,511 less than the revised budget. The hotel TOT shortfall was partially offset by Short-Term Vacation Rental (STVR) TOT revenue that was $81,720 higher than the revised budget. The variances reflect travelers’ preference for STVR accommodations over traditional hotels during the COVID-19 pandemic. Charges for Services category totaled $331,534 higher than the revised budget. The variance was due to an overall higher than expected increase in permit activity in FY 21. In addition, large development projects at Santa Fe Christian, Solana Highlands, and Solana 101 led to one-time increases in the permit and plan check categories.

Expenditures: Actual expenditures incurred were $1,300,098 or 5.9% lower than the final year-end budget as a result of the proactive approach by City Council and staff in response to the COVID-19 pandemic. Building Services category was $109,966 over-budget as the gains in permit revenue are offset by proportional costs for providing these services. Actual expenditures for legal professional services were $274,062 as compared to the amended budget amount of $476,700, resulting in a savings for this budget unit of $202,638. These savings were the result of less than expected litigation expenses during FY 2021. Capital Outlay expenditures were $507,337 compared to the budgeted amount of $1,005,723, resulting in savings of $498,386 due to the deferral of projects during the COVID-19 pandemic.

Ending Fund Balance: Ending Fund Balance for the year increased by 13.5% from FY 2019-2020, for a total ending balance of $17,543,567. Included in the fund balance are non-spendable, restricted, committed, and assigned funds which total $10,407,952. The unassigned portion is the part of fund balance that is available for use without constraints established by legal requirements and totals $7,138,002. The fund balance at the fiscal year end of June 30, 2021 is equal to 85% of the FY 2021 General Fund appropriations.
14 CAPITAL ASSET AND DEBT ADMINISTRATION
Capital Assets
The capital assets of the City are those assets that are used in performance of City functions including infrastructure assets. Capital assets include equipment, buildings, land, park facilities, and roads.

At June 30, 2021, net capital assets of the governmental activities totaled $34,899,886 and the net capital assets of the business-type activities totaled $17,389,211. Depreciation on capital assets is recognized in the government-wide financial statements. (See Table 5 below and Note 5 to the financial statements.)
Over the next five years, funding for capital assets will come from current fund balances and revenues such as Gas Tax and TransNet. Significant projects are La Colonia Park Improvements, Lomas Santa Fe Drive Corridor Improvements, Marine Safety Center Renovations, and ongoing pavement management, traffic calming, and storm drain and sewer pipeline improvements and replacement projects.
2021 2021 2020
Land $ 5,337,440 $ 5,337,440 $ 111,706 $ 111,706 $ 5,449,146 $ 5,449,146 Buildings &
Improvements 10, 651,917 10,958,176 16,950,169 12,052,676 27,602,086 23,010,852 Equipment &
Vehicles 1,340,465 1,221,436 264,516 281,048 1,604,981 1,502,484 Infrastructure 15,897,009 16,850,321 - 15, - 897,009 16,850,321 Work in Progress 1,673,055 1,241,746 62,820 6,156,690 1,735,875 7,398,436 $ 34,899,886 $ 35,609,119 $ 17,389,211 $ 18,602,120 $ 52,289,097 $ 54,211,239 Table 5
City of Solana Beach Capital Assets at Year-End
(Net of Depreciation)
Business Total Activities ActivitiesGovernmental
2020 2021 2020
Debt
At year-end, the City had $7,842,631 in governmental type debt and $16,869,623 in proprietary debt (including premium on debt issuance) totaling $24,712,254. This debt is a liability of the government and amounts to $1,787 per capita.
15 See Table 6 below and Notes 9 through 11 to the financial statements for detailed descriptions. 2021
Refunding lease 287,700 $ 423,000 $ - $ - $ 287,700 $ 423,000 $ Capital leases 406,650 590,421 - - 406,650 590,421
SEJPA Loan Payable-2011 - - - 60,000 - 60,000
SEJPA Loan Payable-2017 - - 10,615,000 10,840,000 10,615,000 10,840,000 2017 Wastewater
Refunding Bond - - 5,820,000 6,105,000 5,820,000 6,105,000 TransNet Bond 5,500,000 5,500,000 - - 5,500,000 5,500,000 Bond premiums - - 383,321 444,133 383,321 444,133
Bond discounts (1,643) (2,709) - - (1,643) (2,709)
Claims and judgements 1,177,000 947,000 - - 1,177,000 947,000 Compensated
absences 472,924 508,845 51,302 58,453 524,226 567,298
$ 7,966,557 7,842,631 $ 16,869,623 $ 17,507,586 $ 24,712,254 $ 25,474,143 $ 2020
Table 6
City of Solana Beach Outstanding Debt at Year-End
Business Total Activities
2020 2021 2020 2021
Activities
Governmental
NEXT YEAR’S BUDGET AND ECONOMIC FACTORS
In June 2021, the City Council adopted a two-year budget for fiscal years ending June 30, 2022 and June 30, 2023.

In considering the City Budget, the City Council and management focused on the challenge of balancing the budget in the midst of the ongoing COVID-19 pandemic. Budget decisions were made with the understanding that, although the economic climate had taken a downturn, it had begun to rebound. Fiscal Years 2022 and 2023 budget projections were filled with uncertainty as the City’s revenue stream for certain revenues was unknown and the need to manage the rate of any expenditure cost increase had to be closely evaluated and monitored. The challenge given these circumstances was to prepare a budget that held costs in line while continuing to provide high quality services and to move forward implementing the City’s five-year capital improvement plan.

Overall, General Fund revenues are projected to increase for FY 2022 by $1,313,448, or 5.7%, as compared to the FY 2021 actual revenues. The primary increases are in tax revenue and projected American Rescue Plan Act (ARPA) grant funds. The City is in line to receive $3,180,686 in ARPA Funds over a two-year period. Although the federal guidance identifies a number of eligible uses of the ARPA funds, Staff believes replacing lost revenue affords the City the broadest latitude in using the funding to support government services.

General Fund expenditures are projected to increase by $2,322,272 or 11.1% in FY 2022 compared to FY 2021 actual expenditures. This increase is primarily due to increases in Public Safety, Salaries & Benefits, and capital projects.
16 CONTACTING THE CITY’S FINANCIAL MANAGEMENT
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 show the City’s fiduciary responsibility for the funds it receives. If you have questions about this report or need additional financial information, contact the City’s Finance Department, at the City of Solana Beach, 635 South Highway 101, Solana Beach, California 92075 or online: http://www.ci.solanabeach.ca.us. 17 THIS PAGE INTENTIONALLY LEFT BLANK
18 BASIC FINANCIAL STATEMENTS
19 THIS PAGE INTENTIONALLY LEFT BLANK
20 GOVERNMENT-WIDE

FINANCIAL STATEMENTS
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22 CITY OF SOLANA BEACH, CALIFORNIA

STATEMENT OF NET POSITION
JUNE 30, 2021
(With comparative totals for June 30, 2020)
Governmental Business-Type
Activities Activities 2021 2020
ASSETS
Cash and investments $ 29,467,996 $ 39,949,519 10,481,523 $ $ 39,085,428 Restricted assets - cash and investments - 3,247,089 3,247,089 2,422,102 Investment in joint venture 35,555,593 - 35,555,593 34,949,555 Receivables:

Accounts, net 1,280,509 670,889 1,951,398 1,910,329
Interest 61,957 27,660 89,617 133,037
Intergovernmental 1,363,341 1,514,950 2,878,291 610,623 Deposits - - - 100,000
Internal balances (1,316,069) 1,316,069 - -
Inventories - 47,545 47,545 47,545
Prepaid costs - 54,212 54,212 53,510
Capital assets not being depreciated 174,526 7,010,495 7,185,021 12,847,582 Capital assets, net of accumulated depreciation 17,214,685 27,889,391 45,104,076 41,363,657 Total Assets 66,955,895 69,106,466 136,062,361 133,523,368

DEFERRED OUTFLOWS OF RESOURCES
Pension related 199,042 3,533,326 3,732,368 3,590,709
OPEB related - - - 14,763
Deferred charge on refunding - - - 68,647
Total Deferred Outflows of Resources 199,042 3,533,326 3,732,368 3,674,119

LIABILITIES
Accounts payable 697,086 2,095,112 2,792,198 3,333,169
Accrued liabilities 60,476 366,571 427,047 349,940
Accrued interest payable 1,984 215,373 217,357 223,827
Deposits payable - 2,918,384 2,918,384 3,003,499
Unearned revenue - 408,022 408,022 395,889
Noncurrent Liabilities
Due within one year: Bonds, loans, leases,
claims, compensated absences 696,053 544,172 1,240,225 1,450,965 Due in more than one year
Net pension liability 15,729,006 927,749 16,656,755 15,280,773 Net OPEB liability 2,126,564 197,296 2,323,860 2,683,840 Bonds, loans, leases, claims, compensated
absences 7,146,578 16,325,451 23,472,029 24,023,178
Total Liabilities 18,967,603 31,488,274 50,455,877 50,745,080

DEFERRED INFLOWS OF RESOURCES
Pension related 17,886 661,052 678,938 930,697
OPEB related 93,661 1,009,528 1,103,189 1,275,839
Total Deferred Inflows of Resources 111,547 1,670,580 1,782,127 2,206,536

NET POSITION
Net investment in capital assets 11,185,890 26,653,123 37,839,013 38,719,253 Restricted:

Redevelopment activities 1,528,599 1,528,599 - 1,427,267 Public safety 748,023 - 748,023 591,923
Parks and recreation 220,542 - 220,542 13,501
Public works 4,423,740 - 4,423,740 3,954,924
Capital projects 3,981,615 - 3,981,615 4,232,955
Debt service 25,754 - 25,754 22,001
Pensions 3,245,475 - 3,245,475 2,422,056
Unrestricted (1,345,933) 36,889,897 35,543,964 32,861,991 Total Net Position $ 39,480,938 $ 48,075,787 $ 87,556,725 $ 84,245,871 Total
Primary Government
See Accompanying Notes to Financial Statements.
23 CITY OF SOLANA BEACH, CALIFORNIA

STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2021
(With comparative totals for June 30, 2020)
Operating Capital
Charges for Contributions Contributions
Expenses Services and Grants and Grants
Functions/Programs:

Primary Government:

Governmental Activities:

General government $ 5,537,474 $ 91,875 $ - $ 301,580
Public safety 13,116,915 325,042 466,509 -
Community development 1,506,502 1,082,510 - -
Community services 1,193,256 276,648 232,674 -
Public works 4,665,830 493,597 1,214,732 -
Interest 356,001 - - -
Total Governmental Activities 2,269,672 26,375,978 1,913,915 301,580 Business-Type Activities:

Sanitation Fund 3,891,241 5,676,286 - -
Solana Energy Alliance Fund 3,841,312 3,567,034 - -
Total Business-Type Activities 7,732,553 9,243,320 - -
Total Primary Government $ 11, 34,108,531 $ 1 512,992 $ ,913,915 $ 301,580 General Revenues:

Taxes:

Property taxes, levied for general purpose
Sales taxes
Transient occupancy taxes
Franchise taxes
Other taxes
Use of money and property
Other
Total General Revenues
Change in Net Position
Net Position - Beginning
Net Position - Ending
Program Revenues
See Accompanying Notes to Financial Statements.
24 Governmental Business-Type
Activities Activities 2021 2020
$ - (5,144,019) $ ( $ 5,144,019) $ (4,985,213)
- (12,325,364) ( 12,325,364) (11,670,253)
- (423,992) (423,992) (395,390)
- (683,934) (683,934) (1,124,066)
- (2,957,501) ( 2,957,501) (3,647,036)
- (356,001) (356,001) (363,326)
- (21,890,811) ( 21,890,811) (22,185,284)
1,785,045 - 1,785,045 1,366,942
(274,278) - (274,278) (171,798)
1,510,767 - 1,510,767 1,195,144
(21,890,811) 1,510,767 (20,380,044) (20,990,140)
- 10,093,847 10,093,847 9,465,402
- 3,689,566 3 ,689,566 3,291,805
- 1,457,156 1 ,457,156 1,456,897
- 789,365 789,365 751,324
- 3,745,720 3 ,745,720 3,619,856
631,813 124,888 756,701 1,555,932
3,121,247 37,296 3,158,543 3,767,257
23,528,714 162,184 23,690,898 23,908,473
1,637,903 1,672,951 3,310,854 2,918,333
37,843,035 46,402,836 84,245,871 81,327,538
$ 39,480,938 $ 87,556,725 48,075,787 $ $ 84,245,871
Primary Government
Net (Expense) Revenue and Changes in Net Position
Total
See Accompanying Notes to Financial Statements.
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26 Governmental Fund Financial Statements
Proprietary Fund Financial Statements
Fiduciary Fund Financial Statements

FUND FINANCIAL STATEMENTS
27 THIS PAGE INTENTIONALLY LEFT BLANK
28 GOVERNMENTAL FUND

FINANCIAL STATEMENTS
29 CITY OF SOLANA BEACH, CALIFORNIA

BALANCE SHEET

GOVERNMENTAL FUNDS
JUNE 30, 2021
(With comparative totals for June 30, 2020)
Special
Revenue Fund
Capital Projects
Fund
General 2021 2020
ASSETS
Cash and investments $ 78,748 18,097,000 $ 2,363,958 $ 8,928,290 $ 29,467,996 $ $ 29,279,786 Restricted cash and investments - 3,247,089 - - 3,247,089 2,422,056 Receivables:

Accounts 996,912 - 3,929 279,668 1,280,509 1,162,513
Accrued interest 32,404 344 6,605 22,604 61,957 102,896 Intergovernmental 1,005,607 - - 357,734 1,363,341 408,927 Due from other funds - 1,282,631 31,171 - 1,313,802 1,044,102 Inventories - - - 47,545 47,545 47,545
Prepaid costs - 54,212 - - 54,212 52,665
Total Assets $ 79,092 24,715,855 $ 2,405,663 $ 9,635,841 $ 36,836,451 $ $ 34,520,490

LIABILITIES
Accounts payable $ 28,145 1,855,980 $ 28,299 $ 182,688 $ $ 2,095,112 $ 2,129,973 Accrued liabilities - 329,943 8,879 27,749 366,571 326,805 Deposits payable - 2,849,158 - 69,226 2,918,384 3,003,499 Due to other funds - - - 575,815 575,815 527,149
Advances from other funds - 2,054,056 - - 2,054,056 2,432,141 Unearned revenues - - - 408,022 408,022 395,889
Total Liabilities 28,145 7,089,137 37,178 1,263,500 8,417,960 8,815,456

DEFERRED INFLOWS OF RESOURCES
Unavailable revenues - 80,764 - 327,767 408,531 66,569
Total Deferred Inflows of Resources - 80,764 - 327,767 408,531 66,569

FUND BALANCES
Nonspendable - 54,212 - - 54,212 52,665
Restricted 50,947 3,245,475 2,368,485 8,508,841 14,173,748 12,664,581 Committed - 901,576 - - 901,576 1,179,507
Assigned - 6,206,689 - - 6,206,689 6,349,702
Unassigned - 7,138,002 - (464,267) 6,673,735 5,392,010
Total Fund Balances 17,545,954 50,947 2,368,485 8,044,574 28,009,960 25,638,465 Total Liabilities, Deferred Inflows of
Resources, and Fund Balances $ 24,715,855 $ 79,092 $ 2,405,663 $ 9,635,841 $ 36,836,451 $ 34,520,490 Other
Governmental
Funds
Total Governmental Funds
TransNet City CIP
See Accompanying Notes to Financial Statements.
30 CITY OF SOLANA BEACH, CALIFORNIA

RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS

TO THE STATEMENT OF NET POSITION
JUNE 30, 2021
Amounts reported for governmental activities in the Statement of Net Position are different because:
$ 28,009,960
34,899,886
$ 3,533,326
(661,052)
(1,009,528)
Total Deferred Outflows and Inflows Related to Postemployment Benefits 1,862,746 408,531
Bonds payable (5,500,000)
Lease revenue bonds (287,700)
Compensated absences (472,924)
Claims (1,177,000)
Leases payable (406,650)
Accrued interest payable on long-term debt (1,984)
Net OPEB liability (2,126,564)
Net pension liability (15,729,006)
Total Long-term Liabilities (25,701,828)
Discount on lease 1,643
Total Premiums, Discounts, and Deferred Items 1,643
Net Position of Governmental Activities $ 39,480,938
Other long-term assets that are not available to pay for current period expenditures and, therefore, are either deferred or not reported in the funds.

Long-term liabilities that are not due and payable in the current period, and therefore, are not reported in the funds.

Governmental funds report the effect of premiums, discounts, and refundings and similar items when debt is first issued, whereas these amounts are deferred and amortized in the Statement of Activities.

Capital assets of $106,489,606, net of accumulated depreciation of $71,589,720, used in governmental activities are not financial resources and, therefore, are not reported in the funds.

Total Fund Balances - Governmental Funds
Differences between expected and actual experiences, assumption changes, and net differences between projected and actual earnings and contributions subsequent to the measurement date for the postretirement benefits (pension and OPEB) are recognized as deferred outflows of resources and deferred inflows of resources on the Statement of Net Position.

Deferred inflows - OPEB related
Deferred inflows - pension related
Deferred outflows - pension related
See Accompanying Notes to Financial Statements.
31 CITY OF SOLANA BEACH, CALIFORNIA

STATEMENT OF REVENUES,

EXPENDITURES AND CHANGES IN FUND BALANCES

GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2021
(With comparative totals for the year ended June 30, 2020) Special
Revenue Fund
Capital Projects
Fund
General 2021 2020

REVENUES
Taxes and assessments $ - 17,515,370 $ - $ 2,260,284 $ 19,775,654 $ $ 16,842,473 Licenses, permits and fees 10,869 521,627 - - 532,496 345,168 Intergovernmental 395,105 137,613 - 1,383,946 1,916,664 3,284,923 Charges for services - 1,006,034 70,716 372,964 1,449,714 1,268,823 Use of money and property 576 590,097 66,026 (24,886) 631,813 1,132,930 Fines and forfeitures - 244,331 - - 244,331 359,703
Other revenues - 3,026,680 93,683 884 3,121,247 3,585,904 Total Revenues 406,550 23,041,752 230,425 3,993,192 27,671,919 26,819,924

EXPENDITURES
Current:

General government 5,032,268 - - 5,032,268 - 4,705,339
Public safety 11,081,431 - - 1,457,476 12,538,907 11,560,008 Public works 2,155,391 3,251 5,265 962,000 3,125,907 3,408,610 Community development 1,258,578 - - 188,300 1,446,878 1,544,402 Community services 631,771 - - 49,211 680,982 803,910
Capital outlay 117,579 507,337 609,562 566,198 1,800,676 1,692,966 Debt service:

Principal retirement - - - 319,071 319,071 316,505
Interest and fiscal charges - 325,105 - 30,630 355,735 365,239 Total Expenditures 445,935 20,666,776 614,827 3,572,886 25,300,424 24,396,979 Excess (Deficiency) of Revenue
Over (Under) Expenditures (39,385) 2,374,976 (384,402) 420,306 2,371,495 2,422,945

OTHER FINANCING SOURCES (USES)
Transfers in - - - 353,500 353,500 799,915
Transfers out - (283,100) - (70,400) (353,500) (799,915) Total Other Financing Sources (Uses) - (283,100) - 283,100 - - Net Change in Fund Balances (39,385) 2,091,876 (384,402) 703,406 2,371,495 2,422,945 Fund Balances - Beginning 90,332 15,454,078 2,752,887 7,341,168 25,638,465 23,215,520 Fund Balances - Ending $ 17,545,954 $ 50,947 $ 2,368,485 $ 8,044,574 $ 28,009,960 $ 25,638,465 TransNet City CIP
Total Governmental Funds
Other
Governmental
Funds
See Accompanying Notes to Financial Statements.
32 CITY OF SOLANA BEACH, CALIFORNIA

RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES,

AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS

TO THE STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2021
Amounts reported for governmental activities in the Statement of Activities are different because:

Net Change in Fund Balances - Total Governmental Funds $ 2,371,495 (709,233)
Earned but unavailable grant revenues $ 327,767
Earned but unavailable miscellaneous revenues 14,195
341,962
Principal paid on leases 319,071
319,071
Accrued interest on long-term debt 800
Amortization of lease discount (1,066)
Compensated absences 35,921
Claims and judgments (230,000)
Changes in pension liabilities and related deferred outflows and inflows of resources (964,435) Changes in OPEB liabilities and related deferred outflows and inflows of resources 473,388 (685,392)
Change in Net Position of Governmental Activities $ 1,637,903 Governmental funds report capital outlays as expenditures. However, in the Statement of Activities, the cost of these assets is allocated over their estimated useful lives and reported as depreciation expense.

This is the amount by which capital outlays exceeded depreciation expense in the current period.

Revenues in the Statement of Activities that do not provide current financial resources are not reported as revenues in the funds.

Bond and other debt proceeds provide current financial resources to governmental funds, but issuing debt increases long-term liabilities in the Statement of Net Position. Repayment of bond and other debt principal is an expenditure in the governmental funds, but repayment reduces long-term liabilities in the Statement of Net Position. Also, governmental funds report the effect of premiums, discounts, and similar items when debt is first issued, whereas these amounts are deferred and amortized in the Statement of Activities.

Some expenses reported in the Statement of Activites do not require the use of current financial resources and, therefore, are not reported as expenditures in the governmental funds.

See Accompanying Notes to Financial Statements.
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34 PROPRIETARY FUND

FINANCIAL STATEMENTS
35 THIS PAGE INTENTIONALLY LEFT BLANK
36 CITY OF SOLANA BEACH, CALIFORNIA

STATEMENT OF NET POSITION

PROPRIETARY FUNDS
JUNE 30, 2021
(With comparative totals for June 30, 2020)
Sanitation Fund
Solana Energy
Alliance Fund 2021 2020
ASSETS
Current Assets:

Cash and cash equivalents $ 10,481,523 $ 1 - $ 0,481,523 $ 9,805,642 Restricted assets - cash and cash equivalents - - - 46
Receivables:

Accounts 145,143 525,746 670,889 690,364
Taxes - - - 57,452
Interest - 27,660 27,660 30,141
Intergovernmental 1,354,075 160,875 1,514,950 201,696
Deposits - - - 100,000
Prepaid costs - - - 845
Total Current Assets 686,621 12,008,401 12, 695,022 10,886,186 Noncurrent Assets:

Advances to other funds 2,054,056 2,054,056 - 2,432,141 Investment in joint venture 35,555,593 - 35, 555,593 34,949,555 Capital Assets:

Land 111,706 - 111,706 111,706
Construction in progress 62,820 - 62,820 6,156,690
Building and improvements 24,613,647 - 24, 613,647 19,391,927 Equipment 828,705 - 828,705 828,705
Less accumulated depreciation (8,227,667) - (8, 227,667) (7,886,908) Total Noncurrent Assets - 54,998,860 54, 998,860 55,983,816 Total Assets 686,621 67,007,261 67, 66, 693,882 870,002

DEFERRED OUTFLOWS OF RESOURCES
Deferred charge on refunding - - - 68,647
Pension related 156,777 42,265 199,042 212,240
OPEB related - - - 1,255
Total Deferred Outflows of Resources 156,777 42,265 199,042 282,142

LIABILITIES
Current Liabilities:

Accounts payable 681,558 15,528 697,086 1,203,196
Accrued liabilities 13,403 47,073 60,476 23,135
Compensated absences 14,172 - 14,172 29,340
Accrued interest payable 215,373 - 215,373 221,043
Due to other funds 737,987 - 737,987 516,953
Loans and bonds payable - current 530,000 - 530,000 570,000 Total Current Liabilities 800,588 1,454,506 2,255,094 2,563,667 Noncurrent Liabilities:

Compensated absences 37,130 - 37,130 29,113
Loans and bonds payable 16,288,321 - 16, 288,321 16,879,133 Net pension liability 728,648 199,101 927,749 884,339
Net OPEB liability 156,628 40,668 197,296 228,245
Total Noncurrent Liabilities 239,769 17,210,727 17, 450,496 18,020,830 Total Liabilities 1,040,357 18,665,233 19, 705,590 20,584,497

DEFERRED INFLOWS OF RESOURCES
Pension related 4,334 13,552 17,886 56,365
OPEB related 19,306 74,355 93,661 108,446
Total Deferred Inflows of Resources 87,907 23,640 111,547 164,811

NET POSITION
Net investment in capital assets - 11,185,890 11, 185,890 12,052,987 Restricted for debt service - - - 46
Unrestricted ( 37,225,008 36, 335,111) 889,897 34,349,803 Total Net Position $ 48,410,898 $ (335,111) $ 48,075,787 $ 46,402,836 Total Proprietary Funds
See Accompanying Notes to Financial Statements.
37 CITY OF SOLANA BEACH, CALIFORNIA

STATEMENT OF REVENUES, EXPENSES

AND CHANGES IN FUND NET POSITION
JUNE 30, 2021
(With comparative totals for June 30, 2020)
Sanitation Fund
Solana Energy
Alliance Fund 2021 2020

OPERATING REVENUES
Charges for services $ 3,567,034 5,676,286 $ 9,243,320 $ $ 9,766,536 Miscellaneous Revenue 161 37,135 37,296 181,353
Total Operating Revenues 3,567,195 5,713,421 9,280,616 9,947,889

OPERATING EXPENSES
Cost of sales and services 3,833,710 2,227,686 6,061,396 6,604,507 Administration 7,602 540,898 548,500 771,192
Depreciation - 391,505 391,505 426,773
Total Operating Expenses 3,841,312 3,160,089 7,001,401 7,802,472 Operating Income (Loss) (274,117) 2,553,332 2,279,215 2,145,417

NONOPERATING REVENUES (EXPENSES)
Interest income 264 124,624 124,888 423,002
Interest expense - (666,139) ( 666,139) (682,773)
Amortization of investment premium - (10,945) (10,945) (10,945) Gain (loss) on disposal of capital assets - (164,807) ( 164,807) - Share in joint venture net gain/(loss) - 110,739 110,739 (75,202) Total Nonoperating Revenues (Expenses) 264 (606,528) ( 606,264) (345,918) Change in Net Position (273,853) 1,946,804 1,672,951 1,799,499 Net Position - Beginning (61,258) 46,464,094 46,402,836 44,603,337 Net Position - Ending $ 48,410,898 $ (335,111) $ 48,075,787 $ 46,402,836 Total Proprietary Funds
See Accompanying Notes to Financial Statements.
38 CITY OF SOLANA BEACH, CALIFORNIA

STATEMENT OF CASH FLOWS

PROPRIETARY FUNDS
JUNE 30, 2021
(With comparative totals for June 30, 2020)
Sanitation Fund
Solana Energy
Alliance Fund 2021 2020

CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers $ 3,702,324 4,342,463 $ 8,044,787 $ $ 10,191,884 Payments to suppliers and service providers (3, (2,510,632) (6, 790,970) 301,602) (6,167,853) Payments to employees for salaries and benefits ( (577,565) ( 132,154) 709,719) (620,508) Net Cash Provided by (Used for) Operating Activities ( 1,254,266 1, 220,800) 033,466 3,403,523

CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
Repayment received from short-term interfund borrowings - 221,034 221,034 367,859 Cash advance made to other governments - (498) (498) (160,377) Net Cash Provided by (Used for) Noncapital Financing Activities - 220,536 220,536 207,482

CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Repayment received from capital-related interfund borrowings - 378,085 378,085 359,764 Proceeds from the sale of assets - 1,053,119 1, 053,119 1,452 Acquisition and construction of capital assets - (396,522) ( 396,522) (3,267,423) Principal paid on capital debt - (570,000) ( 570,000) (555,000) Interest paid on capital debt - (663,974) ( 663,974) (691,366) Net Cash Provided by (Used for) Capital and Related Financing Activities - (199,292) ( 199,292) (4,152,573)

CASH FLOWS FROM INVESTING ACTIVITIES
Interest on investments 264 127,105 127,369 437,753
Investment in joint venture - (506,244) ( 506,244) (409,356) Net Cash Provided by (Used for) Investing Activities 264 (379,139) ( 378,875) 28,397 Net Increase (Decrease) in Cash and Cash Equivalents - 675,835 675,835 (513,171) Cash and Cash Equivalents - Beginning - 9,805,688 9, 805,688 10,318,859 Cash and Cash Equivalents - Ending $ 10,481,523 $ 10,481,523 - $ $ 9,805,688 Reconciliation of Operating Income (Loss) to Net Cash Provided by (Used for) Operating Activities:

Operating income (loss) $ ( 2,553,332 $ 2, 274,117) $ 279,215 $ 2,145,417 Adjustments to Reconcile Operating Income (Loss) to
Net Cash Provided by (Used for) Operating Activities:

Depreciation expense 391,505 - 391,505 426,773
(Increase) decrease in accounts receivable (58,202) 135,129 76,927 119,704 (Increase) decrease in intergovernmental receivables (1,312,756) - (1, 312,756) 124,291 (Increase) decrease in deposits - 100,000 100,000 -
(Increase) decrease in prepaid costs - 845 845 846
(Increase) decrease in pension related deferred outflows of resources 1,271 11,927 13,198 4,110 (Increase) decrease in OPEB related deferred outflows of resources 251 1,004 1,255 (1,255) Increase (decrease) in accounts payable ( (283,526) ( 222,584) 506,110) 435,808 Increase (decrease) in accrued liabilities 36,144 1,197 37,341 (12,044) Increase (decrease) in compensated absences (7,151) - ( 7,151) 7,051 Increase (decrease) in net pension liability 25,712 17,698 43,410 73,597 Increase (decrease) in net OPEB liability (4,981) (25,968) (30,949) 23,789 Increase (decrease) in pension related deferred inflows of resources (7,228) (31,251) (38,479) 19,469 Increase (decrease) in OPEB related deferred inflows of resources (2,383) (12,402) (14,785) 35,967 Total Adjustments 53,317 (1,299,066) (1, 245,749) 1,258,106 Net Cash Provided by (Used for) Operating Activities $ 1,254,266 $ (220,800) $ 1,033,466 $ 3,403,523 Schedule of Non-Cash Investing, Capital, and Financing Activities:

Amortization of bonds premium/discount $ 68,647 $ - $ - $ 68,647 Unrealized gain on investment in joint venture 110,739 - 110,739 (75,202) Total Proprietary Funds
See Accompanying Notes to Financial Statements.
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40 FIDUCIARY FUND

FINANCIAL STATEMENTS
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42 CITY OF SOLANA BEACH, CALIFORNIA

STATEMENT OF FIDUCIARY NET POSITION

FIDUCIARY FUNDS
JUNE 30, 2021
(with comparative totals for the year ended June 30, 2020) ASSETS
Cash and cash equivalents $ - $ - $ - $ 98,875 $ 229,890 $ 112,380 Investments:

Money market mutual funds 1,265,851 849,021 - - 1,646 17,287 Local Agency Investment Fund - - - - 59,324 178,690
Asset-backed securities - - - - 9,718 3,608
Federal agency securities - - - - 85,126 30,989
Medium term corporate notes - - - - 33,510 12,627
Supranational securities - - - - 1,350 618
US Treasury securities - - - - 66,680 23,552
Receivables:

Accrued interest - - - - 431 837
Due from other governments - - - - 1,562 1,623
Total Assets 849,021 1,265,851 - 98,875 489,237 382,211

LIABILITIES
Accounts payable 413 629 - 600 3,796 1,964
Accrued liabilities - - 1,419 1,294 - -
Accrued interest - - 6,413 6,750 68,699 71,376
Long-term liabilities:

Due in one year - - 124,900 120,900 75,000 85,000
Due in more than one year - - 2,165,000 2,289,900 1,780,000 1,855,000 Total Liabilities 413 629 2,320,052 2,419,444 1,927,495 2,013,340

NET POSITION
Restricted for:

Postemployment benefits other than pensions 848,608 1,265,222 - - - - Individuals, organizations, and other governments - - (2,320,052) (2,320,569) (1,438,258) (1,631,129) Total Net Position $ 1,265,222 $ 848,608 $ (2,320,052) $ (2,320,569) $ (1,438,258) $ (1,631,129) 2021 2020
Custodial Funds
Private-Purpose Trust Fund
of the Former RDA
Successor Agency
OPEB Trust Fund
2020
Pension (and Other
Employee Benefit) Trust Fund
2021 2021 2020
See Accompanying Notes to Financial Statements.
43 CITY OF SOLANA BEACH, CALIFORNIA

STATEMENT OF CHANGES IN FIDUCIARY NET POSITION

FIDUCIARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2021
(with comparative totals for the year ended June 30, 2020) 2021 2020 2021 2020 2021 2020

ADDITIONS
Contributions:

Employers $ 204,000 $ 198,000 $ - $ - $ - $ -
Total contributions 198,000 204,000 - - - -
Investment earnings:

Net increase (decrease) in fair value of investments (1,817) 153,596 (192) - (3,836) 5,046 Interest, dividends, and other 65,596 23,098 - 47 3,584 7,544 Total investment earnings 21,281 219,192 (192) 47 (252) 12,590 Property taxes - - 136,847 100,899 - -
Special assessment collections - - - - 215,329 97,439
Miscellaneous - - - - 99,256 -
Total Additions 219,281 423,192 136,655 100,946 314,333 110,029

DEDUCTIONS
Administrative expenses - - 44,117 41,638 - -
Contractual services 6,578 4,208 12,353 4,606 8,973 50,020 Interest expense - - 79,668 83,637 112,489 190,671
Total Deductions 6,578 4,208 136,138 129,881 121,462 240,691 Net Increase (Decrease) in Fiduciary Net Position 215,073 416,614 517 (28,935) 192,871 (130,662) Net Position - Beginning 633,535 848,608 (2,320,569) (2,291,634) (1,631,129) - Restatement of Net Position - - - - - (1,500,467)
Net Position - Beginning, as Restated 633,535 848,608 (2,320,569) (2,291,634) (1,631,129) (1,500,467) Net Position - Ending $ 1,265,222 $ 848,608 $ (2,320,052) $ (2,320,569) $ (1,438,258) $ (1,631,129) Pension (and Other
Employee Benefit) Trust Fund Private-Purpose Trust Fund Custodial Funds
Successor Agency
OPEB Trust Fund of the Former RDA
See Accompanying Notes to Financial Statements.
44 NOTES TO BASIC FINANCIAL STATEMENTS
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46 CITY OF SOLANA BEACH, CALIFORNIA

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2021
Note 1: Summary of Significant Accounting Policies
The basic financial statements of the City of Solana Beach, California (the “City”) have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) as applied to governmental agencies. The Governmental Accounting Standards Board (“GASB”) is the accepted standard setting body for establishing governmental accounting and financial reporting principles. The more significant of the City’s accounting policies are described below. a. Financial Reporting Entity
The City was formed July 1, 1986 after an election held June 3, 1986 in the proposed incorporated area. The City's incorporation involved a reorganization consisting primarily of the incorporation of the City of Solana Beach; the detachment of territory from the Cardiff Sanitation District and annexation of the same territory to the Solana Beach Sanitation District; the establishment of the Solana Fire Protection District and Solana Beach Sanitation District as subsidiary districts of the City; and the establishment of five improvement districts of the City, which coincided with five previously existing county service areas (CSAs). The City merged the Fire District into the City by dissolving the District and creating a separate Fire Department within the City's General Fund effective January 1, 1988. Effective July 1, 1990, the Solana Beach Sanitation District was dissolved and is now a department of the City.

The Solana Beach Public Facilities Corporation (Corporation) was incorporated on July 25, 1990 as a nonprofit public benefit corporation duly organized and existing under the Nonprofit Public Benefit Corporation Law. Its purpose is to benefit the City by providing financing for the planning, development, acquisition, construction, improvement, extension, repair, and renovation of public works projects, public facilities, furnishings, and equipment for use by the City. The Corporation does not issue separate financial statements. The City’s basic financial statements have the Corporation included using the blended method since the governing bodies of the component unit is substantially the same as the governing body of the City. The Corporation provides services entirely to the City. b. Basis of Accounting and Measurement Focus
The accounts of the City are organized on the basis of funds, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenues, and expenditures or expenses as appropriate. Government resources are allocated to and accounted for in individual funds based upon the purpose for which they are to be spent and the means by which spending activities are controlled.

Government-Wide Financial Statements
The City’s Government–Wide Financial Statements include a Statement of Net Position and a Statement of Activities and Changes in Net Position. These statements present summaries of Governmental and Business-Type Activities for the City, the primary government, accompanied by a total column. Fiduciary activities of the City are not included in these statements.
47 CITY OF SOLANA BEACH, CALIFORNIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2021
Note 1: Summary of Significant Accounting Policies (Continued) The Government-Wide Financial Statements are presented on an “economic resources” measurement focus and the accrual basis of accounting. Accordingly, all of the City’s assets and liabilities, including capital assets and related infrastructure assets and long-term liabilities, are included in the accompanying Statement of Net Position. The Statement of Activities presents changes in Net Position. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which the liability is incurred.

Certain types of transactions are reported as program revenues for the City in three categories:
 Charges for services
 Operating grants and contributions
 Capital grants and contributions
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 primary government column.

In the Statement of Activities, internal service fund transactions have been eliminated; however, those transactions between governmental and business-type activities have not been eliminated. The following interfund activities have been eliminated:
 Due to, Due from other funds
 Advances to, Advances from other funds
 Transfers in, Transfers out
Governmental Fund Financial Statements
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 non-major funds aggregated. An accompanying schedule is presented to reconcile and explain the differences in net position as presented in these statements to the net position presented in the government-wide financial statements. The City has presented all major funds that met the applicable criteria.

All governmental funds are accounted for on a spending or “current financial resources” measurement focus and the modified accrual basis of accounting. Accordingly, only current assets and current liabilities are included on the Balance Sheet. The Statement of Revenues, Expenditures and Changes in Fund Balances present increases (revenue and other financing sources) and decreases (expenditures and other financing uses) in net current assets. Under the modified accrual basis of accounting, revenues are recognized in the accounting period in which they become both measurable and available to finance expenditures of the current period. 48 CITY OF SOLANA BEACH, CALIFORNIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2021
Note 1: Summary of Significant Accounting Policies (Continued) Revenues are recorded when received in cash, except those revenues subject to accrual (90 days after year-end, with the exception of property taxes, which is 60 days) are recognized when due. The primary revenue sources, which have been treated as susceptible to accrual by the City, are property taxes, sales taxes, franchise taxes, gas taxes, transient occupancy taxes, intergovernmental revenues, and other taxes.

Expenditures are recorded in the accounting period in which the related fund liability is incurred.

Unavailable revenues arise when potential revenues do not meet both the “measurable” and “available” criteria for recognition in the current period. Unearned revenues also arise when the government receives resources before it has a legal claim to them, as when grant monies are received prior to incurring qualifying expenditures. In subsequent periods when both revenue recognition criteria are met or when the government has a legal claim to the resources, the unavailable revenue is removed from the balance sheet and revenue is recognized.

The Reconciliation of the Fund Financial Statements to the Government-Wide Financial Statements is provided to explain the differences.

The City reports the following major governmental fund:

General Fund - accounts for all revenues and expenditures used to finance the traditional services associated with a municipal government which are not accounted for in the other funds. In Solana Beach, these services include general government, public safety, public works, community development, and community services.

TransNet Special Revenue Fund - accounts for revenues received and expenditures made related to transportation development, transit, and related studies. Funding is provided to the City as a secondary recipient under agreement with the County of San Diego and with San Diego Association of Governments (SANDAG).

City Capital Projects Fund - accounts for the acquisition, construction and improvement of capital facilities and infrastructure. Projects are funded by transfers from the General Fund.

Proprietary Fund Financial Statements
Proprietary fund financial statements include a Statement of Net Position, a Statement of Revenues, Expenses and Change in Net Position, and a Statement of Cash Flows for all proprietary funds.

Proprietary funds are accounted for using the “economic resources” measurement focus and the accrual basis of accounting. Accordingly, all assets and liabilities (whether current or noncurrent) are included on the Statement of Net Position. The Statement of Revenues, Expenses and Changes in Net Position presents increases (revenues) and decreases (expenses) in total net position. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which the liability is incurred. 49 CITY OF SOLANA BEACH, CALIFORNIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2021
Note 1: Summary of Significant Accounting Policies (Continued) Operating revenues, such as charges for services, in the proprietary funds are those revenues that are generated from exchange transactions as the primary operations of the fund. Exchange transactions are those in which each party receives and gives up essentially equal values. All other revenues, such as subsidies, taxes, and investment earnings, which result from non-exchange transactions or ancillary activities are reported as non-operating revenues. Operating expenses are those expenses that are essential to the primary operations of the fund. All other expenses are reported as non-operating expenses.

The City reports the following major proprietary fund:

Sanitation Fund - is used to account for operations that are financed and operated in a manner similar to private business enterprises, where the intent of the governing body is that costs of providing sewage and wastewater treatment services to the general public on a continuing basis be financed or recovered primarily through user charges.

Solana Energy Alliance Fund - is used to account for operations that are financed and operated in a manner similar to private business enterprises, where the intent of the governing body is that the cost of providing clean energy services to the general public on a continuing basis be financed or recovered primarily through user charges.

Fiduciary Fund Financial Statements
Fiduciary fund financial statements include a Statement of Net Position and a Statement of Changes in Net Position. The City’s fiduciary funds include custodial funds, one pension (and other employee benefits) trust fund, and one private-purpose trust fund. Custodial funds are used to account for collections received from special assessment districts and their disbursement to bondholders. Spending of Custodial fund resources is controlled primarily through legal agreements and applicable State and Federal laws.

The Private-Purpose Trust Fund is used to account for the assets and liabilities of the former redevelopment agency and the allocated revenue to pay estimated installment payments of enforceable obligations until the obligations of the former redevelopment agency are paid in full and assets have been liquidated.

The Fiduciary Funds are accounted for using the “economic resources” measurement focus and the accrual basis of accounting. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which the liability is incurred. 50 CITY OF SOLANA BEACH, CALIFORNIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2021
Note 1: Summary of Significant Accounting Policies (Continued) c. Cash, Cash Equivalents, and Investments
The City pools its available cash for investment purposes. The City considers pooled cash and investment amounts, with original maturities of three months or less, to be cash equivalents.

The cash flow statements require presentation of “cash and cash equivalents”. For the purpose of the statement of cash flows, the City considers all proprietary fund pooled cash and investments as “cash and cash equivalents”, as such funds are available to the various funds as needed.

Highly liquid market investments with maturities of one year or less at time of purchase are stated at amortized cost. All other investments are stated at fair value. Market value is used as fair value for those securities for which market quotations are readily available.

The City participates in an investment pool managed by the State of California titled Local Agency Investment Fund (LAIF) which has invested a portion of the pool funds in structured notes and asset-backed securities. LAIF’s investments are subject to credit risk with the full faith and credit of the State of California collateralizing these investments. In addition, these structured notes and asset-backed securities are subject to market risk as to change in interest rates.
d. Restricted Cash and Investments
Certain restricted cash and investments are held by fiscal agents for the redemption of bonded debt and for acquisition and construction of capital projects. e. Capital Assets
Capital assets are valued at historical cost or estimated historical cost if actual historical cost was not available. Donated capital assets, donated works of art and similar items, and capital assets received in a service concession arrangement are reported at acquisition value at the time of acquisition by the City. City policy has set the capitalization threshold for reporting infrastructure and all other capital assets at $5,000. Depreciation is recorded on a straight-line basis over estimated useful lives of the assets as follows:

Buildings and improvements 20-50 years
Equipment 3-25 years
Infrastructure - sewer lines 40-50 years
Infrastructure - other 20-60 years
The City defines infrastructure as the basic physical assets that allow the City to function.

The assets include roads and streets, curbs, gutters and sidewalks, streetlights, signs and signals, park equipment, and storm drains. The appropriate operating department maintains information regarding the infrastructure assets. 51 CITY OF SOLANA BEACH, CALIFORNIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2021
Note 1: Summary of Significant Accounting Policies (Continued) For all infrastructure systems, the City elected to use the Basic Approach as defined by GASB Statement No. 34 for infrastructure reporting. The City commissioned an appraisal of City owned infrastructure and property that determined the original cost, which is defined as the actual cost to acquire new property in accordance with market prices at the time of first construction/acquisition.

Original costs were developed in one of three ways: (1) historical records; (2) standard unit costs appropriate for the construction/acquisition date; or (3) present cost indexed by a reciprocal factor of the price increase from the construction/acquisition date to the current date. The accumulated depreciation, defined as the total depreciation from the date of construction/acquisition to the current date on a straight line, unrecovered cost method was computed using industry accepted life expectancies for each infrastructure subsystem. The book value was then computed by deducting the accumulated depreciation from the original cost.
f. Deferred Outflows/Inflows of Resources
In addition to assets, the statement of financial position and governmental fund balance sheet will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position or fund balance that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/ expenditure) until then. The City has three items that qualify for reporting in this category. One is the deferred charge on refunding reported in the government-wide statement of net position. 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. The other two are the deferred outflows relating to the net pension and other post-employment benefit (OPEB) obligations reported in the government-wide statement of net position and proprietary statement of net position. These outflows are the results of contributions made after the measurement period, which are recognized in the following year, and of differences between expected and actual experience, changes of assumptions, changes in the City’s proportionate share of the net pension liability, and the net difference between projected and actual earnings on OPEB plan investments. These amounts are deferred and amortized over the expected average remaining service lifetime or five years.

In addition to liabilities, the statement of financial position or governmental fund balance sheet will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position or fund balance that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The City reports one item, which arises only under the modified accrual basis of accounting that qualifies for reporting in this category. The item, unavailable revenue, is reported only in the governmental funds balance sheet. The governmental funds report unavailable revenues related to resources received outside of the City’s availability period. The City reports two other items that qualify for reporting in this category which are the deferred inflows related to the pensions and deferred inflows relating to other post-employment benefits reported in the government-wide statement of net position and proprietary statement of net position.

These inflows are the result of differences between expected and actual experience, changes in assumptions, net differences between projected and actual earnings on pension plan investments, changes in the City’s proportionate share of the net pension liability, and differences between the City’s contributions and the City’s share of recognized contributions. These amounts are deferred and amortized straight-line over the expected average remaining service lifetime.
52 CITY OF SOLANA BEACH, CALIFORNIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2021
Note 1: Summary of Significant Accounting Policies (Continued) g. Long-Term Liabilities
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 are amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount.

In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. h. Compensated Absences
Government-Wide Financial Statements
For governmental activities, compensated absences are recorded as incurred and the related expenses and liabilities are reported.

Fund Financial Statements
In governmental funds, compensated absences are recorded as expenditures in the years paid, as it is the City’s policy to liquidate any unpaid vacation or sick leave at June 30 from future resources, rather than currently available financial resources.

Accordingly, the entire unpaid liability for the governmental funds is recorded in the government-wide financial statements, as these amounts will be liquidated from future resources. In the proprietary fund, compensated absences are expensed in the period they are earned, and the unpaid liability is recorded as a long-term liability of the fund.
i. Pensions
For purposes of measuring the net pension liability and deferred outflows/inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the City’s California Public Employees’ Retirement System (CalPERS) plans (Plans) and additions to/deductions from the Plans’ fiduciary net position have been determined on the same basis as they are reported by CalPERS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. j. Other Post-Employment Benefits (OPEB)
For purposes of measuring the net OPEB liability, deferred outflows and deferred inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net position of the City’s plan (OPEB Plan), the assets of which are held by Public Agency Retirement Services (PARS), and additions to/deductions from the OPEB Plan’s fiduciary net position have been determined by an independent actuary. For this purpose, benefit payments are recognized when currently due and payable in accordance with the benefit terms. Investments are reported at fair value.
53 CITY OF SOLANA BEACH, CALIFORNIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2021
Note 1: Summary of Significant Accounting Policies (Continued) Generally accepted accounting principles require that the reported results must pertain to liability and asset information within certain defined timeframes. For this report, the following timeframes are used:

Valuation Date June 30, 2019
Measurement Date June 30, 2021
Measurement Period July 1, 2020 to June 30, 2021
Gains and losses related to changes in total OPEB liability and fiduciary net position are recognized in OPEB expense systematically over time. Amounts are first recognized in OPEB expense for the year the gain or loss occurs. The remaining amounts are categorized as deferred outflows and deferred inflows of resources related to OPEB and are to be recognized in future OPEB expense. The recognition period differs depending on the source of the gain or loss with the net difference between projected and actual earnings on OPEB plan investments being recognized over 5 years and all other amounts being recognized over the expected average remaining service lifetime (EARSL) of

5.0 years at June 30, 2021.
k. Net Position
In the Government-Wide and Proprietary Fund Financial Statements, net position is classified in the following categories:

Net Investment in Capital Assets – This amount consists of capital assets, net of accumulated depreciation and reduced by outstanding debt that was issued for the acquisition, construction, or improvement of the assets.

Restricted Net Position – This amount is restricted by external creditors, grantors, contributors, or laws or regulations of other governments.

Unrestricted Net Position – This amount is all net position that do not meet the definition of “net investment in capital assets” or “restricted net position.” When an expense is incurred for purposes for which both restricted and unrestricted net position are available, the City’s policy is to apply restricted net position first. l. Net Position Flow Assumption
Sometimes the government will fund outlays for a particular purpose from both restricted (e.g., restricted bond or grant proceeds) and unrestricted resources. In order to calculate the amounts to report as restricted – net position and unrestricted – net position in the government-wide and proprietary fund financial statements, a flow assumption must be made about the order in which the resources are considered to be applied. It is the government’s policy to consider restricted – net position to have been depleted before unrestricted – net position is applied.
54 CITY OF SOLANA BEACH, CALIFORNIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2021
Note 1: Summary of Significant Accounting Policies (Continued) m. Fund Balances
In the Governmental Fund Financial Statements, fund balances are classified in the following categories:

Nonspendable – Items that cannot be spent because they are not in spendable form, such as prepaid items and inventories, items that are legally or contractually required to be maintained intact, such as principal of an endowment or revolving loan funds.

Restricted – Restricted fund balances encompass the portion of net fund resources subject to externally enforceable legal restrictions. This includes externally imposed restrictions by creditors, such as through debt covenants, grantors, contributors, laws, or regulations of other governments, as well as restrictions imposed by law through constitutional provisions or enabling legislation.

Committed – Committed fund balances encompass the portion of net fund resources, the use of which is constrained by limitations that the government imposes upon itself at its highest level of decision making, normally the governing body, and that remain binding unless removed in the same manner. The City Council is considered the highest authority for the City. The formal action required to establish, modify, or rescind a fund balance commitment is through a resolution.

Assigned – Assigned fund balances encompass the portion of net fund resources reflecting the government’s intended use of resources. Assignment of resources can be done by the highest level of decision making or by a committee or official designated for that purpose. The City Council has authorized through a resolution the City Manager and the Director of Finance for that purpose.

Unassigned – This is the residual classification that includes all spendable amounts not contained in the other classifications. The General Fund is the only fund that reports a positive unassigned fund balance. In other governmental funds, it is not appropriate to report a positive unassigned fund balance amount. However, in governmental funds other than the General Fund, if expenditures incurred for specific purposes exceed amounts that are restricted, committed, or assigned to those purposes, it may be necessary to report a negative unassigned fund balance in that fund.

When expenditures are incurred for purposes for which both restricted and unrestricted fund balances are available, the City’s policy is to apply restricted fund balances first, then unrestricted fund balances as they are needed.
n. Fund Balance Flow Assumptions
Sometimes the government will fund outlays for a particular purpose from both restricted and unrestricted resources (the total of committed, assigned, and unassigned fund balance). In order to calculate the amounts to report as restricted, committed, assigned, and unassigned fund balance in the governmental fund financial statements a flow assumption must be made about the order in which the resources are considered to be applied. It is the government’s policy to consider restricted fund balance to have been depleted before using any of the components of unrestricted fund balance. Further, when the components of unrestricted fund balance can be used for the same purpose, committed fund balance is depleted first, followed by assigned fund balance. Unassigned fund balance is applied last.
55 CITY OF SOLANA BEACH, CALIFORNIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2021
Note 1: Summary of Significant Accounting Policies (Continued) When expenditures are incurred for purposes where only unrestricted fund balances are available, the City uses the unrestricted resources in the following order: committed, assigned, and unassigned.
o. Property Taxes
Property taxes are levied on July 1 and are payable in two installments: November 1 and February 1 of each year. Property taxes become delinquent on December 10 and April 10, for the first and second installments, respectively. The lien date is January 1. The County of San Diego, California (County) bills and collects the property taxes and remits them to the City in installments during the year. City property tax revenues are recognized when received in cash except at year end when they are accrued pursuant to the modified accrual basis of accounting. The City recognizes as revenues at June 30 available taxes or those collected within 90 days. The County is permitted by State law to levy taxes at 1% of full market value (at time of purchase) and can increase the property tax rate no more than 2% per year. The City receives a share of this basic levy. p. Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
q. Change in Accounting Principle and Effect of New Accounting Standards The City implemented Government Accounting Standards Board (GASB) Statement No. 84, Fiduciary Activities during fiscal year 2020-21. The requirements of this Statement will enhance consistency and comparability by (1) establishing specific criteria for identifying activities that should be reported as fiduciary activities and (2) clarifying whether and how business-type activities should report their fiduciary activities. Greater consistency and comparability enhance the value provided by the information reported in financial statements for assessing government accountability and stewardship. The change in accounting principle resulted in a prior period adjustment in the amount of $(1,500,467) being reported for the custodial funds in the Statement of Changes in Fiduciary Net Position.

The City early adopted GASB Statement No. 98, the Annual Comprehensive Financial Report, which establishes the term annual comprehensive financial report and its acronym ACFR. The new term and acronym replace instances of comprehensive annual financial report and its acronym in generally accepted accounting principles for state and local governments. This statement was developed in response to concerns raised by stakeholders that the common pronunciation of the acronym for comprehensive annual financial report sounds like a profoundly objectionable racial slur. This Statement’s introduction of the new term is founded on a commitment to promoting inclusiveness. 56 CITY OF SOLANA BEACH, CALIFORNIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2021
Note 2: Reconciliation of Government-Wide and Fund Financial Statements a. Explanation of Certain Differences Between the Governmental Fund Balance Sheet and the Government-Wide Statement of Net Position
The governmental fund balance sheet includes a reconciliation between fund balance – total governmental funds and net position – governmental activities as reported in the government-wide statement of net position. One element of that reconciliation explains that “other long-term assets that are not available to pay for current period expenditures and, therefore, are either labeled unavailable or no reported in the funds.” The details of this $408,531 are as follows:

Grant revenues $ 327,767
Miscellaneous revenues 80,764
Total other long-term assets 408,531 $
b. Explanation of Certain Differences Between the Governmental Fund Statement of Revenues, Expenditures, and Changes in Fund Balances and the Government-Wide Statement of Activities
The governmental fund statement of revenues, expenditures, and changes in fund balances includes a reconciliation between net changes in fund balances – total governmental funds and changes in net position of governmental activities as reported in the government-wide statement of activities. One element of that reconciliation explains that “governmental funds report capital outlays as expenditures. However, in the statement of activities, the cost of these assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which capital outlays exceeded depreciation expense in the current period.” The details of this $(709,233) difference are as follows:

Capital outlay $ 1,723,018
Depreciation expense (2,432,251)
Total other long-term assets (709,233) $
Note 3: Stewardship, Compliance, and Accountability
a. Excess of Expenditures over Appropriations
At June 30, 2021, the Transnet major special revenue fund reported expenditures exceeding appropriations in the amount of $137,043.
b. Deficit Fund Equity
At June 30, 2021, the following nonmajor funds reported deficit fund balance:

Nonmajor Fund Name Classification Deficit
Transportation Development Act Special Revenue Fund $ 103,489 CDBG Special Revenue Fund 16,660
Boating & Waterways Special Revenue Fund 297,613
Developer Pass-Thru Special Revenue Fund 87
Assessment Districts CIP Capital Projects Fund 46,418
57 CITY OF SOLANA BEACH, CALIFORNIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2021
Note 3: Stewardship, Compliance, and Accountability (Continued) These deficits are due to the timing of reimbursements and revenues for these activities, and are expected to be eliminated through future revenues. c. Budgetary Compliance
The Assessment Districts CIP capital projects fund did not adopt a budget for the fiscal year ended June 30, 2021.

Note 4: Cash and Investments
The following is a summary of pooled cash and investments and restricted cash and investments at June 30, 2021:

Governmental
Activities
Business-Type
Activities Total
Cash and investments $ 29,467,996 $ 10,481,523 $ 487,244 $ 40,436,763 Restricted cash and investments 3,247,089 1, - 265,851 4,512,940 Total $ 32,715,085 $ 10,481,523 $ 1,753,095 $ 44,949,703 Government-Wide Statement of
Net Position Fiduciary
Funds
Statement of
Net Position
Cash and investments consisted of the following at June 30, 2021:

Cash:

Cash on hand 400 $
Demand deposits 8,554,302
Total cash 8,554,702
Investments:

Local Agency Investment Fund 4,087,811
Investments 27,794,250
Cash and investments held in PARS Section 115 Trust 4,512,940 Total investments 36,395,001
Total cash and investments $ 44,949,703
a. Cash Deposits
The carrying amounts of the City’s cash deposits were $8,554,302 at June 30, 2021.

Bank balances were $9,088,822 at that date. The total amount of which was collateralized or insured with securities held by the pledging financial institutions in the City’s name is discussed below. The $534,520 difference represents outstanding checks and other reconciling items.

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 58 CITY OF SOLANA BEACH, CALIFORNIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2021
Note 4: Cash and Investments (Continued)
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.

As of June 30, 2021, none of the City’s deposits with financial institutions in excess of federal depository insurance limits were held in uncollateralized accounts. For investments identified herein as held by fiscal agent, the fiscal agent selects the investment under the terms of the applicable trust agreement, acquires the investment, and holds the investment on behalf of the City.
b. Investments
Investments Authorized by the California Government Code and the City’s Investment Policy
The following table identifies the investment types that are authorized for the City by the California Government Code and the City’s investment policy. The table also identifies certain provisions of the California Government Code (or the City’s investment policy, if more restrictive) that address interest rate risk and concentration of credit risk. The City has no investments held by bond trustee.

Investment Types Authorized by State Law
Authorized by
Investment Policy
Maximum
Maturity
*Maximum
Percentage of
Portfolio
*Maximum
Investment in
One Issuer
Local agency bonds Yes 5 years None 65,000,000
U.S. Treasury bills Yes 5 years None 25%
U.S. Treasury notes Yes 5 years None 25%
U.S. agency securities Yes 5 years None 25%
Banker's acceptances Yes 180 days 25% 5%
Commercial paper Yes 270 days 25% 10%
Non-Negotiable certificates of deposit Yes 5 years 20% 5% Negotiable certificates of deposit Yes 5 years 30% None Certificate of Deposit Placement Services Yes 5 years 30% None Collateralized Bank Deposits Yes 1 year None None
Repurchase agreements Yes 1 year None None
Medium-term notes Yes 5 years 30% 5%
Mutual funds Yes 5 years 20% None
Money market mutual funds Yes 5 years 20% None
Asset backed security Yes 5 years 20% 5%
Supranational Yes 5 years 30% 10%
Local Agency Investment Fund (LAIF) Yes 5 years $65,000,000 None * Based on state law or investment policy requirements, whichever is more restrictive.

Investments Authorized by Debt Agreements
Investments of debt proceeds held by fiscal agent 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 fiscal agents. The table also identifies certain provisions of these debt agreements that address interest rate risk and concentration of credit risk. 59 CITY OF SOLANA BEACH, CALIFORNIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2021
Note 4: Cash and Investments (Continued)
Authorized Investment Type
Maximum
Maturity
Maximum
Percentage
Allowed
Maximum
Investment in
One Issuer
U.S. Treasury obligations None None None
U.S. agency securities None None None
Banker's acceptances 360 days None None
Commercial paper 270 days None None
Money market mutual funds 90 days None None
Investment contracts None None None
Local Agency Investment Fund (LAIF) N/A None None
c. External Investment Pool
The City is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by the California Government Code 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 on the City’s pro rata share of the fair value provided by LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on accounting records maintained by LAIF, which are recorded on an amortized cost basis.

The entire balance of the City’s share of the investment pool is available for withdrawal at any time. LAIF is not registered with the Securities and Exchange Commission and is not rated. Deposits and withdrawals in LAIF are made on the basis of $1 and not fair value.

Accordingly, the City’s investment in this pool is measured on uncategorized inputs not defined as Level 1, 2, or 3.
d. Risk Disclosures
Interest Rate Risk
Interest rate risk is the risk that the market value of investments in the portfolio will fall due to changes in market interest rates. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. The City manages this risk by investing its operating funds primarily in shorter-term securities, money market mutual funds, or similar investment pools to ensure liquidity and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary to provide the cash flow and liquidity needed for operations.
12 Months 13 to 24 25 to 60
Investments: Fair Value or Less Months Months
Local Agency Investment Fund 4,087,811 $ 4,087,811 $ - $ $ - US Treasury 9,358,556 1,222,735 3,977,277 4,158,544
US Government Agency Securities
Federal Home Loan Bank 2,686,696 713,381 1,973,315 -
Federal Farm Credit Bank 4,399,693 1,216,503 2,250,934 932,256 Federal National Mortgage Association 2,589,210 2,069,269 - 519,941 Federal Home Loan Mortage Corporation 2,271,762 - 2,271,762 - Medium Term Notes 4,703,207 1,632,981 628,078 2,442,148 Money Market Mutual Funds 231,820 231,820 - -
Supranationals 189,374 189,374 - -
Asset Backed Securities 1,363,932 7,697 85,390 1,270,845 Investments Held in Section 115 Trust:

Money Market Mutual Funds 4,512,940 4,512,940 - -
$ 36,395,001 $ 13,625,868 $ 11,173,637 $ 11,595,496
Remaining Investment Maturities
60 CITY OF SOLANA BEACH, CALIFORNIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2021
Note 4: Cash and Investments (Continued)
Credit Risk
Credit Risk is the risk of loss due to failure of the security issuer. The risk can be identified through the rating assigned by a nationally recognized statistical rating organization to the issuers of securities. The City minimizes this risk by investing only in investment types allowed for municipalities by the Government Code as listed on the City’s investment policy and investing only in instruments that are most credit worthy. 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 of June 30, 2021, for each investment type.

Total as of Minimum
Investments: June 30, 2021 Legal Rating AAA AA+/Aa1 Exempt Local Agency Investment Fund 4,087,811 $ N/A - $ - $ 4,087,811 $ US Treasury 9,358,556 N/A - 9,358,556 -
US Government Agency Securities
Federal Home Loan Bank 2,686,696 N/A - 2,686,696 -
Federal Farm Credit Bank 4,399,693 N/A - 4,399,693 -
Federal National Mortgage Association 2,589,210 N/A - 2,589,210 - Federal Home Loan Mortage Corporation 2,271,762 N/A - 2,271,762 - Medium Term Notes 4,703,207 A 4,703,207 - -
Money Market Mutual Funds 231,820 AAA 231,820 - -
Supranationals 189,374 AA - 189,374 -
Asset Backed Securities 1,363,932 AA 1,363,932 - -
Investments Held in Section 115 Trust:

Money Market Mutual Funds 4,512,940 AAA 4,512,940 - -
$ 36,395,001 $ 4,744,760 $ 6,256,513 $ 25,393,728
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.

Concentration of Credit Risk
The investment policy of the City contains no limitations on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code. The City had investments in the following US Government Agency issuers which held more than 5% of the investment portfolio:

Investment Percentage
Issuer Amount of Portfolio
Federal Home Loan Bank $ 2,686,696 7.4%
Federal Farm Credit Bank 4,399,693 12.1%
Federal National Mortgage Association 2,589,210 7.1%
Federal National Mortage Loan Corporationn 2,271,762 6.2% 61 CITY OF SOLANA BEACH, CALIFORNIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2021
Note 4: Cash and Investments (Continued)
e. Fair Value Hierarchy
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. Except for LAIF and money market mutual funds, which are considered uncategorized, all of the City’s unrestricted investments are valued using Level 2 inputs. Certificates of Deposit, any local agency, and Registered Treasury Notes or Bonds of any other 49 States are classified in Level 2 of the fair value hierarchy are value using specified fair market value factors.

The Section 115 Trust values its assets as follows:

Level 1 Level 2 Total
Money Market Mutual Funds 388,453 $ $ 4,124,487 $ 4,512,940 Note 5: Capital Assets
The following is a summary of changes in capital assets for governmental activities for the year ended June 30, 2021:

Balance
June 30, 2020 Additions Deletions Transfers
Balance
June 30, 2021
Governmental Activates:

Non-Depreciable Assets:

Land 5,337,440 $ - $ - $ - $ 5,337,440 $
Construction in progress 1,241,746 1,213,704 - (782,395) 1,673,055 Total non-depreciable assets 6,579,186 1,213,704 - (782,395) 7,010,495 Depreciable Assets:

Buildings 6,016,915 - - 6,016,915 -
Improvements 13,709,809 - 292,093 - 14,001,902
Equipment 2,519,028 454,217 - 2,973,245 -
Vehicles 2,548,858 55,097 - 2,603,955 -
Infrastructure 73,392,792 - 490,302 - 73,883,094
Total depreciable assets 98,187,402 509,314 782,395 - 99,479,111 Less accumulated depreciation:

Buildings (3,120,277) (120,791) - (3,241,068) -
Improvements (5,648,271) (477,561) - (6,125,832) -
Equipment (2,128,809) (225,913) - (2,354,722) -
Vehicles (1,717,641) (164,372) - (1,882,013) -
Infrastructure (56,542,471) (1,443,614) - (57,986,085) - Total accumulated depreciation (69,157,469) (2,432,251) - (71,589,720) - Total depreciable assets, net 29,029,933 (1,922,937) 782,395 - 27,889,391 Total capital assets, net $ 35,609,119 $ (709,233) $ - $ 34,899,886 - $ 62 CITY OF SOLANA BEACH, CALIFORNIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2021
Note 5: Capital Assets (Continued)
Governmental activities depreciation expense for capital assets for the year ended June 30, 2021, is as follows:

General Government $ 211,789
Public Safety 252,818
Public Works 1,499,234
Community Development 42,657
Community Services 425,753
Total Depreciation Expense 2,432,251 $
The following is a summary of changes in capital assets for business-type activities for the year ended June 30, 2021:

Balance
June 30, 2020 Additions Deletions Transfers
Balance
June 30, 2021
Business-Type Activities
Non-Depreciable Assets:

Land $ 111,706 $ - $ - $ 111,706 - $
Construction in progress 6,156,690 396,522 (6,490,392) - 62,820 Total non-depreciable assets 6,268,396 396,522 (6,490,392) - 174,526 Depreciable Assets:

Building and improvements 19,391,927 (1,268,672) - 6,490,392 24,613,647 Equipment 828,705 - - 828,705 -
Total depreciable assets 20,220,632 (1,268,672) - 6,490,392 25,442,352 Less accumulated depreciation:

Building and improvements (7,339,251) (374,973) 50,746 (7,663,478) - Equipment (547,657) (16,532) - (564,189) -
Total accumulated depreciation (7,886,908) (391,505) 50,746 (8,227,667) - Total depreciable assets, net 12,333,724 (391,505) (1,217,926) 6,490,392 17,214,685 Total capital assets, net $ 18,602,120 $ (1,217,926) 5,017 $ $ 17,389,211 - $ Business-type activities depreciation expense for capital assets for the year ended June 30, 2021, is $391,505, recorded wholly in the Sanitation Fund.

Note 6: City Employees Retirement Plan - Pension Plans
a. General Information about the Pension Plans
Plan Descriptions
All qualified permanent and probationary employees are eligible to participate in the Public Agency Cost-Sharing Multiple-Employer Defined Benefit Pension Plan (Plan) administered by the California Public Employees’ Retirement System (CalPERS). The Plan consists of individual rate plans (benefits tiers) within a safety risk pool (police and fire) and a miscellaneous risk pool (all other). Plan assets may be used to pay benefits for any employer rate plan of safety and miscellaneous pools. Accordingly, rate plans within the safety or miscellaneous pools are not separate plans under GASB Statement No. 68.

Individual employers may sponsor more than one rate plan in the miscellaneous or safety risk pools. The City sponsors nine rate plans (three miscellaneous and six safety). Benefit provisions under the Plan are established by State statue and City resolution. CalPERS 63 CITY OF SOLANA BEACH, CALIFORNIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2021
Note 6: City Employees Retirement Plan - Pension Plans (Continued) issues publicly available reports that include a full description of the pension plan regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website.

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

Below is a summary of the plans’ provisions and benefits in effect at June 30, 2021, for which the City has contracted:

Major Benefit Options Miscellaneous*
Miscellaneous
Second Tier
Miscellaneous
PEPRA
Safety Fire First
Tier*
Safety Fire
Second Tier
Safety Fire
PEPRA
Safety Lifeguard
First Tier*
Safety Lifeguard
Second Tier*
PEPRA Other
Safety
Hire Date
Prior to
January 1, 2010
January 1, 2010
but prior to
January 1, 2013
On or after
January 1, 2013
Prior to
January 1, 2010
January 1, 2010
but prior to
January 1, 2013
On or after
January 1, 2013
Prior to
January 1, 2010
January 1, 2010
but prior to
January 1, 2013
On or after
January 1, 2013
Benefit Provision
Benefit Formula 2.5% @ 55 2.0% @ 60 2.0% @ 62 3.0% @ 50 2.0% @ 50 2.7% @ 57 3.0% @ 50 2.0% @ 50 2.7% @ 57 Social Security no no no no no no no no no
Full/ Modified full full full full full full full full full Benefit vesting schedule 5 yrs service 5 yrs service 5 yrs service 5 yrs service 5 yrs service 5 yrs service 5 yrs service 5 yrs service 5 yrs service Benefit payments monthly for life monthly for life monthly for life monthly for life monthly for life monthly for life monthly for life monthly for life monthly for life Retirement age 50-63 50-63 52-67 50 50-55 50-57 50-55 50-55 52-67 Monthly benefits, as a
% of eligible
compensation

1.426% to

2.418%

1.092% to

2.418% 1.0% to 2.5% 3% 2.0% to 2.7% 2% to 2.7% 1.423% to 2.0% 1.423% to 2.0% 2.0% to 2.7% Required employer
contribution rates 11.432% 8.081% 6.985% 21.927% 16.636% 13.034% 21.927% 18.152% 13.034% Required employee
contribution rates 8.000% 7.000% 6.750% 9.000% 9.000% 12.000% 9.000% 9.000% 12.000% *closed to new member entrants
Contribution Description
Section 20814(c) of the California Public Employees’ Retirement Law (PERL) requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate.

The total plan contributions are determined through the CalPERS’ annual actuarial valuation process. For public agency cost-sharing plans covered by either the Miscellaneous or Safety risk pools, the Plan’s actuarially determined rate is based on the estimated amount necessary to pay the Plan’s allocated share of the risk pool’s costs of benefits earned by employees during the year, and any unfunded accrued liability. The City is required to contribute the difference between the actuarially determined rate and the contribution rate of employees.

For the year ended June 30, 2021, the contributions recognized as a reduction to the net pension liability was $1,624,905.
64 CITY OF SOLANA BEACH, CALIFORNIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2021
Note 6: City Employees Retirement Plan - Pension Plans (Continued) b. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions
As of June 30, 2021, the City of Solana Beach reported net pension liabilities for its proportionate shares of the net pension liability of each Plan as follows:

Proportionate Share of
Net Pension Liability
Miscellaneous $ 6,151,557
Safety 10,505,198
Total $ 16,656,755
The net pension liability of each of the Plans is measured as of June 30, 2020, and the total pension liability for each Plan used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2019 rolled forward to June 30, 2020 using standard update procedures. The City’s proportion of the net pension liability was 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 each Plan measured as of June 30, 2019 and 2020, respectively, was as follows:

Miscellaneous Safety Combined
Proportion - June 30, 2019 0.05532% 0.09380% 0.14912%
Proportion - June 30, 2020 0.05654% 0.09655% 0.15309%
Change - Increase (Decrease) 0.00122% 0.00275% 0.00397% For the year ended June 30, 2021, the City recognized pension expense as follows:

Miscellaneous Safety Total Plans
$ 1,672,516 1,041,137 $ 2,713,653 $
65 CITY OF SOLANA BEACH, CALIFORNIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2021
Note 6: City Employees Retirement Plan - Pension Plans (Continued) At June 30, 2021, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

Deferred Outflows Deferred Inflows
of Resources of Resources
Miscellaneous Plan
Pension contributions subsequent to measurement date $ 685,457 $ - Adjustment due to differences in proportions 178,443 -
Difference between expected and actual experience 317,007 - Difference between actual contributions and the
proportionate share of contributions - 214,892
Changes in assumptions - 43,875
Net difference between projected and actual earnings on plan investments 182,742 -
Total Miscellaneous Plan 1,363,649 258,767
Safety Plan
Pension contributions subsequent to measurement date 1,045,632 - Adjustment due to differences in proportions 280,141 -
Difference between expected and actual experience 814,624 - Difference between actual contributions and the
proportionate share of contributions - 385,178
Changes in assumptions - 34,993
Net difference between projected and actual earnings on plan investments 228,322 -
Total Safety Plan 2,368,719 420,171
Total All Plans $ 3,732,368 $ 678,938
The $1,731,089 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, 2022. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:

Year Ended Miscellaneous Safety
June 30, Plan Plan Total
2022 60,897 $ 217,083 $ $ 277,980
2023 156,108 355,657 511,765
2024 122,445 237,889 360,334
2025 79,975 92,287 172,262
$ 419,425 $ 902,916 $ 1,322,341
Deferred Outflows/(Inflows) of Resources
66 CITY OF SOLANA BEACH, CALIFORNIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2021
Note 6: City Employees Retirement Plan - Pension Plans (Continued) c. Actuarial Methods and Assumptions
Actuarial Assumptions
For the measurement period ended June 30, 2020 (the measurement date), the total pension liability was determined by rolling forward the June 30, 2019 total pension liability.

The June 30, 2019, total pension liabilities were based on the following actuarial methods and assumptions:

Actuarial Cost Method Entry Age Normal Cost Method
Discount Rate 7.15%
Inflation 2.50%
Salary Increases Varies by Entry Age and Service
Mortality Rate Table (1) Derived using CalPERS’ Membership Data for all Funds
Post Retirement Benefit
Increase
Contract COLA up to 2.50% until Purchasing
Power Protection Allowance Floor on
Purchasing Power applies
Actuarial Assumptions
(1) The mortality table used was developed based on CalPERS’ specific data. The table includes 20 years of mortality improvements using Society of Actuaries Scale BB. For more details on this table, please refer to the 2017 experience study report on the CalPERS' website.

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.

The long-term expected rate of return on pension plan investments was determined using a building-block method in which expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. In determining the long-term expected rate of return, CalPERS took into account both short-term and long-term market return expectations as well as the expected pension fund cash flows. Using historical returns of all of the funds’ asset classes, expected compound (geometric) returns were calculated over the short-term (first 10 years) and the long-term (11+ years) using a building-block approach. Using the expected nominal returns for both short-term and long-term, the present value of benefits was calculated for each fund. The expected rate of return was set by calculating the rounded single equivalent expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and long-term returns. The expected rate of return was then set equal to the single equivalent rate calculated above and adjusted to account for assumed administrative expenses.
67 CITY OF SOLANA BEACH, CALIFORNIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2021
Note 6: City Employees Retirement Plan - Pension Plans (Continued) The expected real rates of return by asset class are as followed:

Asset Class
New Strategic
Allocation
Real Return
Years 1 - 10 (1)
Real Return
Years 11+ (2)
Global Equity 50.0% 4.80% 5.98%
Fixed Income 28.0% 1.00% 2.62%
Inflation Assets 0.0% 0.77% 1.81%
Private Equity 8.0% 6.30% 7.23%
Real Assets 13.0% 3.75% 4.93%
Liquidity 1.0% 0.00% -0.92%
(1) An expected inflation of 2.00% used for this period. (2) An expected inflation of 2.92% used for this period.

Sensitivity of the Net Pension Liability to Changes in the Discount Rate The following presents the City’s proportionate share of the net pension liability of the Plan, calculated using the discount rate for each Plan, as well as what the City’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1% point lower (6.15 percent) or 1% point higher (8.15 percent) than the current rate:

Discount Rate - 1% Current Discount Rate Discount Rate + 1% Plan Type 6.15% 7.15% 8.15%
Miscellaneous 9,325,054 $ 6,151,557 $ 3,529,397 $
Safety 15,312,220 10,505,198 6,560,582
Total 24,637,274 $ 16,656,755 $ 10,089,979 $
d. Pension Plan Fiduciary Net Position
Detailed information about each pension plan’s fiduciary net position is available in the separately issued CalPERS financial reports. See CalPERS website for additional information.

Note 7: Other Post-Employment Benefits
a. Plan Description
The City of Solana Beach Retiree Healthcare Plan (“Plan”) is a single employer defined benefit healthcare plan administered by the City. The Plan provides healthcare benefits to eligible retirees and their dependents through the California Public Employees’ Retirement System healthcare program (PEMHCA). Benefit provisions are established and may be amended through agreements and memorandums of understanding between the City, its non-represented employees and the unions representing City employees. The Retiree Healthcare Plan does not issue a financial report.

The City provides the PEMHCA minimum benefit ($136 per month for 2021) but no less than $325 per month for employees retired before January 1, 2007 and $290 per month for employees hired before January 1, 2007.
68 CITY OF SOLANA BEACH, CALIFORNIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2021
Note 7: Other Post-Employment Benefits (Continued)
b. Plan Membership
At June 30, 2021, the measurement date, the following numbers of participants were covered by the benefit terms:

Inactive plan members or beneficiaries currently receiving benefit payments 50 Inactive plan members entitled to but not yet receiving benefit payments 14 Active plan members 65
129
c. Contributions
The contribution requirements of the Plan participants and the City are established by and may be amended by the City pursuant to agreements with its non-represented employees and the unions representing City Employees. The City pays cash and implied subsidy benefit payments and PEMHCA administrative fees directly from City assets. Contributions made to the trust are on an ad-hoc basis. On average over the past 5 years, 0.98 percent of payroll was contributed to the trust each year.

The City contributed $480,132 during the 2021 fiscal year which consisted of $178,856 of pay-as-you-go benefit payments, $204,000 in contributions to the trust, and $97,276 in implied subsidy benefits. Retired plan members and their beneficiaries pay the annual premium cost not paid by the employer.
d. Net OPEB Liability of the City
June 30, 2021 June 30, 2020
Total OPEB Liability (TOL) 3, $ 3,532,448 582,741 $
Fiduciary Net Position (FNP) 1,258,881 848,608
Net OPEB Liability (NOL) 2, $ 2,683,840 323,860 $
Funded Status (FNP/TOL) 35.1% 24.0%
Fiscal Year Ending
The City’s net OPEB liability was measured as of June 30, 2021, and the total OPEB liability used to calculate the net OPEB liability was determined by an actuarial valuation dated June 30, 2019 that was rolled forward to determine the June 30, 2021 total OPEB liability, based on the following actuarial methods and assumptions:
e. Actuarial Assumptions
The total OPEB liability was determined by an actuarial valuation as of June 30, 2019, using the following actuarial assumptions, applied to all periods included in the measurement, unless otherwise specified:
 Actuarial Valuation Date: June 30, 2019
 Contribution Policy: City contributes at least the full ADC  Discount Rate and Long-Term Expected Rate of Return on Assets: 6.00% at June 30, 2021; 6.00% at June 30, 2020; Expected City contributions projected to keep sufficient plan assets to pay all benefits from trust
 General Inflation: 2.75% annually
69 CITY OF SOLANA BEACH, CALIFORNIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2021
Note 7: Other Post-Employment Benefits (Continued)
 Mortality, Retirement, Disability, Termination: CalPERS 1997-2015 Experience Study  Mortality Improvement: Mortality projected fully generational with Scale MP-2019  Salary Increases: Aggregate – 3% annually; Merit – CalPERS 1997-2015 Experience Study
 Medical Trend: Non-Medicare – 7.25% for 2021, decreasing to an ultimate rate of 4% in 2076; Medicare – 6.3% for 2021, decreasing to an ultimate rate of 4% in 2076  PEMHCA Minimum Increases: 4.25% annually
 Cap Increases: 0%
 Healthcare Participation for Future Retirees: Actives & Surviving Spouses Hired < 1/1/07: Covered – 90%; Waived – 70%. Actives & Surviving Spouses Hired > 1/1/07:

Covered – 60%; Waived – 50%. Retirees & Surviving Spouses: Covered 100%; Waived < 65 – 20% at 65; Waived > 65 – 0%
 Changes of Assumptions: None
 Changes of Benefit Terms: None
f. Changes in the OPEB Liability
Total OPEB
Liability
Fiduciary Net
Position
Net OPEB
Liability
Balance at June 30, 2020 3,532,448 $ 847,218 $ 2,685,230 $ Changes for the year
Service Cost 115,154 - 115,154
Interest 210,592 - 210,592
Assumption changes - - -
Actual vs. Expected Experience - - -
Contributions - employer - 480,132 (480,132)
Net investment income - 210,366 (210,366)
Benefit payments* (275,453) (275,453) -
Administrative Expenses - (3,382) 3,382
Net changes 50,293 411,663 (361,370)
Balance at June 30, 2021 3,582,741 $ 1,258,881 $ 2,323,860 $ *Benefit payments include an implied subsidy of $97,276 for the measurement date June 30, 2021
g. Sensitivity of the Net OPEB Liability to Changes in the Discount Rate Sensitivity of the net OPEB liability to changes in the discount rate. The following presents the net OPEB liability of the City, as wells as what the City’s net OPEB liability would be if it were calculated using a discount rate that is 1-percentage-point lower or 1-percentage-point higher than the current discount rate:
1% Decrease
(5.00%)
Current Rate
(6.00%)
1% Increase
(7.00%)
Net OPEB liability $ 2,749,798 $ 2,323,860 $ 1,970,920
70 CITY OF SOLANA BEACH, CALIFORNIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2021
Note 7: Other Post-Employment Benefits (Continued)
h. Sensitivity of the Net OPEB Liability to Changes in the Health Care Cost Trend Rates Sensitivity of the net OPEB liability to changes in the healthcare cost trend rates. The following presents the net OPEB liability of the City, as wells as what the City’s net OPEB liability would be if it were calculated using healthcare cost trend rates that are 1-percentage-point lower or 1-percentage-point higher than the current healthcare cost trend rates:
1% Decrease Current Trend 1% Increase
Net OPEB liability $ 2,028,828 $ 2,323,860 $ 2,741,615
i. OPEB Plan Fiduciary Net Position
The plan fiduciary net position is reported in the OPEB Trust Fund included in the City’s Statement of Fiduciary Net Position.
j. OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB For the fiscal year ended June 30, 2021, the City recognized OPEB income of $39,125. As of fiscal year ended June 30, 2021, the City reported deferred outflows of resources related to OPEB from the following sources:

Deferred Outflows Deferred Inflows
of Resources of Resources
Differences between expected and
actual experience - $ 30,398 $
Changes in assumptions - 963,915
Net difference between projected and
actual earnings on plan investments - 108,876
Total - $ 1,103,189 $
Amounts reported as deferred outflows of resources related to OPEB will be recognized as expense as follows:

Deferred
Fiscal Year Ended Outflows/(Inflows)
June 30, of Resources
2022 (308,690) $
2023 (307,597)
2024 (280,018)
2025 (145,808)
2026 (61,076)
Thereafter -
71 CITY OF SOLANA BEACH, CALIFORNIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2021
Note 8: Commitments and Contingencies
a. Litigation
The City is a defendant in certain legal actions arising in the normal course of operations.

The accompanying basic financial statements reflect a liability for the probable amounts of loss associated with these claims.
b. Construction Commitments
Construction Commitments
The following material construction commitments existed at June 30, 2021:

Project Name Contract Amount
Expenditures as of
June 30, 2021
Remaining
Commitments
Drain Rehab $ 978,955 $ 606,460 $ 372,495
c. Sales Tax – TransNet Debt Commitment
On November 10, 2010, Solana Beach executed an agreement with The San Diego Association of Governments (SANDAG) relating to the 2010 Series A Bonds Build American Bonds (BABs) for the completion of several projects including the Highway 101 streetscape and traffic calming project and other eligible projects. In the agreement, SANDAG withholds one-sixth of the interest due each month when Sales Tax is sent from the Board of Equalization (BOE) in an effort to have the full amount with the Trustee by the 1st of April and 1st of October.

Note 9: Risk Management
a. General Liability Insurance
Public Risk Innovation, Solutions, and Management (PRISM), formerly known as CSAC - Excess Insurance Authority, is a member-directed risk sharing pool of counties and public entities. With the dissolution of SANDPIPA, the City elected to join the PRISM pool as a new member and procured all lines of insurance coverage for the City. PRISM is ranked as the second largest public entity risk pool and the largest property and casualty pool in the nation.

The City has a Self-Insured Retention (SIR) of $100,000 per claim and additional coverage above its SIR with PRISM to $5 million per claim; there is an additional $45 million of reinsurance above PRISM coverage bringing the total coverage to over $50 million per claim.
b. Workers’ Compensation
Beginning October 1, 2004, the City became fully self-insured with respect to Workers’ Compensation. The City has an SIR of $125,000 per claim and additional coverage above its SIR with PRISM to $5 million per claim; there is an additional $45 million of reinsurance above PRISM coverage bringing the total coverage to over $50 million per claim, up to the statutory workers’ compensation limits set by the State of California. 72 CITY OF SOLANA BEACH, CALIFORNIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2021
Note 9: Risk Management (Continued)
The workers’ compensation and general liability claims payable of $1,177,000 reported at June 30, 2021, includes all claims for which information prior to the issuance of the financial statements indicates that it was probable that a liability had been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated. During the past three fiscal (claims) years none of the above programs of protection have had settlements or judgments that exceeded pooled or insured coverage. There have been no significant reductions in pooled or insured liability coverage in the prior year. Changes in the claims liability amounts were as follows:

Beginning of
Fiscal Year
Liability
Current Year Claims
and Changes in
Estimates
Claim
Payments
Balance at
Fiscal Year
End
2018-2019 1,026,000 $ $ ( 142,144 $ 994,000 174,144) $
2019-2020 994,000 ( 291,083 947,000 338,083)
2020-2021 947,000 ( 529,364 1,177,000 299,364)
The City also maintains insurance coverage in the following specific areas: real and personal property damage, boiler and machinery, special events, cyber liability, and pollution.

Note 10: Leases
a. Energy Efficiency/Conservation Upgrades
On May 9, 2012, the City entered into a capital lease with Municipal Finance Corporation for various energy efficiency/conservation upgrades at City facilities. The lease was executed in the amount of $818,696. Rental payments are due in thirty-one semi-annual payments of $35,187 and include interest at the rate of 3.45%. The City also executed an acquisition fund agreement with Deutsche Bank National Trust Company for distribution of the funds. At June 30, 2021, the balance of the lease liability was $406,650. b. Fire Truck Lease
In 2016, the City entered into a capital lease with Municipal Finance Corporation for a fire truck at the cost of $614,759. Rental payments are due in annual installments of $131,944 which includes interest at the rate of 2.40% per annum. Payments are due July of each year. At June 30, 2021, the lease liability is completely repaid, with no balance outstanding.

The future principal and interest lease payments as of June 30, 2021, were as follows:

Year Ending June 30, Governmental Activities
2022 $ 70,374
2023 70,374
2024 70,374
2025 70,374
2026 70,374
2027-2029 105,561
Total minimum lease payments 457,431
Less: amount representing interest (50,781)
Present value of minimum lease payments $ 406,650
73 CITY OF SOLANA BEACH, CALIFORNIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2021
Note 11: Long-Term Liabilities
a. Bonds Payable
San Diego County Regional Transportation Commission Sales Tax Revenue Bonds On October 28, 2010, the San Diego Association of Governments (SANDAG), acting as the San Diego County Regional Transportation Commission, issued $338,960,000 Taxable Build America Bonds 2010 Series A (Limited Tax Bonds). SANDAG is responsible for the administration of programs under the TransNet Extension ordinance, Proposition A, which sets forth the permitted uses for revenues from a half cent transaction and use tax in San Diego County (TransNet Extension Program). In fiscal year ended June 2010, the City borrowed $5,500,000 from the TransNet debt financing program for the Highway 101 Streetscaping/Traffic Calming Project and other projects eligible under the terms of the debt financing and applicable SANDAG policies and approved projects. 2017 Wastewater Revenue Refunding Bonds. The bond is wholly secured by sales tax revenues pledged for the payment of debt service. In the event of default, all sales tax revenues pledged for the payment of the debt must be transferred to the bond trustee; however, there is no acceleration of payment on outstanding debt service. The total amount of the bond outstanding at June 30, 2021, is $5,500,000.
2017 Wastewater Revenue Refunding Bonds
On August 1, 2017, the City, issued $6,865,000 of 2017 Wastewater Revenue Refunding Bonds to refund, on a current basis, the outstanding Solana Beach Public Financing Authority Subordinate Wastewater Revenue Bonds, Series 2006, which were issued to finance the improvement, betterment, renovation, and expansion of certain facilities within the City’s municipal wastewater enterprise. These bonds have a 19-year maturity with principal payments ranging from $210,000 to $485,000 with the final maturity paid on March 1, 2036. Interest on the bonds is payable semi-annually March 1 and September 1 commencing on March 1, 2018. Interest rates range from 4.00% to 4.375%. Failure by the City to make debt service payments on the Bonds constitutes an event of default under the Indenture and the Trustee is permitted to pursue remedies at law or in equity to enforce the City’s obligation to make such payments. Although the Trustee has the right to accelerate the total unpaid principal amount of the debt service payments on the Bonds, there is no assurance that the City would have sufficient funds to pay the accelerated amounts.

The Bonds are paid solely from, and secured by a pledge of, installment payments and moneys in the funds and account held under the indenture. The installment payments are special limited obligations of the City payable solely from and secured by a pledge of and first lien on residual net revenues of the Wastewater System. Residual net revenues consist of revenues derived from the Wastewater System and remaining after the payment of operating and maintenance expense and debt service on the JPA Loan Payable. The loan amount outstanding at June 30, 2021, is $5,820,000. 74 CITY OF SOLANA BEACH, CALIFORNIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2021
Note 11: Long-Term Liabilities (Continued)
b. Direct Borrowings and Direct Placements
Lease Revenue Bonds – ABAG
On January 10, 2002, the City issued $3,465,000 of Series 2002 ABAG Lease Revenue Bonds to advance refund $2,185,000 of the outstanding Certificates of Participation, Series 1992, and $1,125,000 of the outstanding Certificates of Participation, Series 1995, establish a reserve account for the bonds, and to pay the cost of issuing the bonds. On November 1, 2011, the City entered into a refunding lease agreement with Municipal Financial Corporation in the amount of $1,388,300 to current refund the outstanding balance of the ABAG Lease Revenue Bonds, Series 2002 and to take advantage of historically low interest rates. The average savings are approximately $21,258 per fiscal year with the net present value savings equal to $185,245. The lease matures on December 1, 2022. Principal payments are due December 1st of each year with semi-annual interest rate at 3.40%. In the event of default, the City remains liable for the continued payment of debt service and damages for breach of the refunding lease agreement. The total amount of the bond outstanding at June 30, 2021, is $287,700.

San Elijo JPA Loan Payable - 2011
On March 1, 2012, the San Elijo Joint Powers Authority issued the 2012 Refunding Revenue Bonds to refund on a current basis the 2003 Refunding Revenue Bonds and prepaid a note to the California Energy Commission. Each local agency entered into a Third Amended and Restated Loan Agreement as of January 1, 2012 to assist in the financing of the Local Agencies’ respective share of the Bonds. The City of Encinitas and the City of Solana Beach will be paying approximately 52% and 48% of total debt service on the bonds, respectively. In the event of default, the trustee may accelerate the payment of outstanding principal and interest. The loan is wholly secured by revenues pledged for the payment of the loan. The amended loan matures on March 1, 2021. The interest rates on the bonds range from 2.00% to 4.00% per year. The City of Solana Beach’s portion of annual principal installments range from $25,000 to $751,155. The bond was fully repaid as of June 30, 2021, with no balance outstanding.

San Elijo JPA Loan Payable - 2017
On June 1, 2017, the San Elijo Joint Powers Authority issued the 2017 Revenue Bonds for the purpose of funding facilities and improvements as part of the Authority’s capital improvement plan. Each local agency entered into a “Series 2017 Loan Agreement” on June 1, 2017 to assist in the financing of the Local Agencies’ respective share of the Bonds.

The City of Encinitas and the City of Solana Beach will each be paying 50 percent of total debt service on the bonds, respectively. In the event of default, the trustee may accelerate the payment of outstanding principal and interest. The loan is wholly secured by revenues pledged for the payment of the loan. The loan matures on March 1, 2047. The interest rates on the bonds range from 3.00% to 5.00% per year. The City of Solana Beach’s portion of annual principal installments range from $217,500 to $642,500. The total amount of the bond outstanding at June 30, 2021, is $10,615,000.
75 CITY OF SOLANA BEACH, CALIFORNIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2021
Note 11: Long-Term Liabilities (Continued)
c. Changes in Long-term Liabilities
The following is a summary of changes in long-term debt for the year ended June 30, 2021:

Balance Balance Amount
Beginning End Due Within
of Year Additions Deletions of Year One Year
Governmental Activities:

Bonds Payable:

Limited Tax Bonds, Series 2010A $ 5,500,000 $ - $ 5,500,000 - $ $ - Discount (2,709) (1,066) - (1,643) -
Total Bonds Payable 5,497,291 (1,066) - 5,498,357 -
Direct Borrowings and Direct Placements:

Lease Revenue Bonds - ABAG 423,000 135,300 - 287,700 142,700 Total Direct Borrowings and Direct Placements 423,000 135,300 - 287,700 142,700 Leases (Note 10) 461,569 54,919 - 406,650 56,831
Compensated Absences 508,845 234,705 270,626 472,924 251,522 Claims (Note 9) 947,000 529,364 299,364 1,177,000 245,000 Total Governmental Activities $ 7,837,705 $ 764,069 $ 759,143 $ 7,842,631 $ 696,053 Business-Type Activities:

Bonds Payable:
2017 Wastewater Revenue Refunding Bonds 6,105,000 $ $ 285,000 - $ $ 5,820,000 $ 300,000 Premium 444,133 60,812 - 383,321 -
Total Bonds Payable 6,549,133 345,812 - 6,203,321 300,000 Direct Borrowings and Direct Placements:

San Elijo JPA Loan Payable - 2011 60,000 60,000 - - -
San Elijo JPA Loan Payable - 2017 10,840,000 225,000 - 10,615,000 230,000 Total Direct Borrowings and Direct Placements 10,900,000 285,000 - 10,615,000 230,000 Compensated Absences 58,453 8,996 16,147 51,302 14,172
Total Business-Type Activities $ 17,507,586 $ 8,996 $ 646,959 $ 16,869,623 $ 544,172 Compensated absences do not have a fixed repayment schedule and become payable when leave is used by employees. Governmental activities’ compensated absences are typically liquidated through the General Fund, and business-type activities’ compensated absences are liquidated through the Water Utility Fund. 76 CITY OF SOLANA BEACH, CALIFORNIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2021
Note 11: Long-Term Liabilities (Continued)
d. Annual Debt Service Requirements
The annual debt service requirements to maturity on the City’s long-term debts as of June 30, 2021, are as follows:

Year Ending June 30, Principal Interest Principal Interest 2022 - $ 325,105 $ 142,700 $ 7,356 $
2023 325,105 - 145,000 2,465
2024 325,105 - - -
2025 325,105 - - -
2026 325,105 - - -
2027-2031 1, - 625,525 - -
2032-2036 1, - 625,525 - -
2037-2041 1,567,452 1,521,388 - -
2042-2046 2,816,793 841,808 - -
2047-2051 1,115,755 94,674 - -
Total $ 5,500,000 $ 7,334,445 $ 287,700 $ 9,821
Year Ending June 30, Principal Interest Principal Interest 2022 $ 300,000 $ 208,006 $ 230,000 $ 438,113
2023 305,000 199,006 237,500 431,213
2024 320,000 186,806 245,000 424,088
2025 330,000 174,006 255,000 414,288
2026 340,000 164,106 267,500 401,538
2026-2031 1,920,000 601,131 1,550,000 1,793,313
2031-2036 2,305,000 216,213 1,955,000 1,388,938
2036-2041 - 2,370,000 - 970,769
2041-2046 - 2,862,500 - 481,000
2046-2051 - 642,500 - 25,700
Total $ 5,820,000 $ 1,749,274 $ 10,615,000 $ 6,768,960
Business-Type Activities
Bonds Payable Direct Borrowings
Governmental Activities
Bonds Payable Direct Placements
77 CITY OF SOLANA BEACH, CALIFORNIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2021
Note 11: Long-Term Liabilities (Continued)
e. Debt Covenant Compliance for JPA Loans
In Compliance with bond issuance covenants, specifically, the 2011 and 2017 San Elijo JPA Bonds, the City is including this table showing debt service coverage for the fiscal year of at least 1.30 times (i) the loan installments coming due and payable during the fiscal year, (ii) all payments required with respect to parity debt, and (iii) amount required to replenish the Reserve Fund as required by the indenture. The City covenants under the 2017 Wastewater Revenue Refunding Bond agreement require while the Bonds remain outstanding and to the extent permitted by law, the City will fix, prescribe, and collect rates and charges which will be at least sufficient to yield during each fiscal year Residual Net Revenues equal to one hundred thirty percent (130%) of Debt Service. The debt coverage ratios for the 2011 and 2017 San Elijo JPA Loans Payable and the 2017 Wastewater Revenue Refunding Bonds are calculated as follows:
2017
2011 and 2017 Wastewater
JPA Loans Bonds
Revenues:

Operating revenues $ 5,676,285 $ 5,676,285
Other operating 37,135 37,135
Non-operating 124,624 124,624
Gross revenues 5,838,044 5,838,044
Expenses: 4,598,867 4,598,867
Net Income 1,239,177 1,239,177
Add Back:

Interest expense 666,139 666,139
Depreciation 391,505 391,505
Loss on disposal of capital assets 164,807 164,807
Amortization of investment in JPA 10,945 10,945
Net revenues available for debt service
(2011 and 2017 JPA Loans) $ 2,472,573 2,472,573
2011 Refunding Revenue Bonds debt service:

Principal repayment $ 60,000 60,000
Interest charges 1,710 1,710
2017 Refunding Revenue Bonds debt service:

Principal repayment 285,000 285,000
Interest charges 444,863 444,863
Total debt service $ 791,573 791,573
Net revenues available for debt service
(2017 Wastewater Bonds) $ 1,681,000
2017 Wastewater Bonds debt service:

Principal repayment $ 285,000
Interest charges 216,556
Total debt service $ 501,556
Coverage ratio 3.1 3.4
78 CITY OF SOLANA BEACH, CALIFORNIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2021
Note 12: Classification of Fund Balances
The City has adopted the provisions of GASB Statement No. 54 Fund Balance and Governmental Fund Type Definitions. GASB 54 establishes Fund Balance classifications based largely upon the extent to which a government is bound to observe constraints imposed upon the use of the resources reported in governmental funds. The Governmental Fund statements conform to this new classification.

Other Total
Governmental Governmental
Classification General TransNet City CIP Funds Funds
Nonspendable:

Prepaid costs 54,212 $ - $ - $ - $ 54,212 $
Total Nonspendable 54,212 - - - 54,212
Restricted:

Section 115 Pension Stabilization Trust 3,245,475 - - - 3,245,475 TransNet - 50,947 - 50,947
Gas Tax - - - 425,941 425,941
Municipal Improvement Districts - - - 1,266,139 1,266,139 Lighting District - - - 3,076,356 3,076,356
COPS - - - 337,919 337,919
Public Safety - - - 396,070 396,070
Fire Mitigation - - - 14,034 14,034
Coastal Area Business/Visitor Assistance & Enhancement - - - 881,435 881,435 Miscellaneous Grants - - - 188,885 188,885
Housing - - - 647,164 647,164
Camp Programs - - - 31,657 31,657
SB1 Streets & Roads - - - 230,424 230,424
Capital Projects - - 2, 987,063 368,485 3,355,548
Debt Service - - 25,754 - 25,754
Total Restricted 3,245,475 50,947 2,368,485 8,508,841 14,173,748 Committed:

Parks & Recreation 32,199 - - 32,199 -
Public Facilities 539,047 - - 539,047 -
Public Art 26,858 - - 26,858 -
In-Lieu Housing 100,786 - - 100,786 -
Other Post-Employment Benefits 202,686 - - 202,686 -
Total Committed 901,576 - - 901,576 -
Assigned:

Housing 1,499,500 - - 1,499,500 -
Community TV 90,564 - - 90,564 -
Street Sweeping 129,637 - - 129,637 -
Park Fees 38,703 - - 38,703 -
Asset Replacement 2,391,099 - - 2,391,099 -
Self-Insurance 618,490 - - 618,490 -
Workers' Compensation 696,923 - - 696,923 -
Public Facilities 741,773 - - 741,773 -
Total Assigned 6,206,689 - - - 6,206,689
Unassigned 7,138,002 - (464,267) - 6,673,735
Total Fund Balance $ 17,545,954 $ 50,947 $ 2,368,485 $ 8,044,574 $ 28,009,960 79 CITY OF SOLANA BEACH, CALIFORNIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2021
Note 12: Classification of Fund Balances (Continued)
The General Fund for financial reporting purposes consists of the General Fund and the following funds that act as internal funds: Self Insurance Liability, Worker’s Compensation, Asset Replacement, Facilities Replacement, OPEB/Pensions, and Real Property Acquisition.

The fund balances for the internal service funds are classified as Assigned with the exception of the OPEB/Pension funds where the fund balance is either Restricted because the fund balance is invested in a Section 115 Trust or Committed because the City Council has limited the use of the funds to either OPEB or Pension purposes and the Real Property Acquisition fund. This fund has a deficit fund balance of $1,993,423 and because the fund balance amount is a deficit, GASB 54 requires this amount to be classified as Unassigned instead of Assigned.

Self Workers' Asset Facilities Real Property PARS PARS
Classification General Fund Insurance Compensation Replacement Replacement Acquisition OPEB Pension Total Nonspendable:

Prepaid costs 54,212 $ - $ - $ - $ - $ - $ - $ - $ 54,212 $ Total Nonspendable 54,212 - - - - - - - 54,212
Restricted:

Section 115 Pension Stabilization Trust - - - - - - - 3,245,475 3,245,475 Total Restricted - - - - - - - 3,245,475 3,245,475
Committed:

Parks & Recreation 32,199 - - - - - - - 32,199
Public Facilities 539,047 - - - - - - - 539,047
Public Art 26,858 - - - - - - - 26,858
In-Lieu Housing 100,786 - - - - - - - 100,786
Other Post-Employment Benefits - - - - - - 202,686 - 202,686 Total Committed 698,890 - - - - 202,686 - 901,576 -
Assigned:

Housing 1,499,500 - - - - - - 1,499,500 -
Community TV 90,564 - - - - - - 90,564 -
Street Sweeping 129,637 - - - - - - 129,637 -
Park Fees 38,703 - - - - - - 38,703 -
Asset Replacement - - 2,391,099 - - - - 2,391,099 -
Self-Insurance 618,490 - - - - - - 618,490 -
Workers' Compensation - 696,923 - - - - - 696,923 -
Public Facilities - - - 741,773 - - - 741,773 -
Total Assigned 1,758,404 618,490 696,923 2,391,099 741,773 - - 6,206,689 - Unassigned 9,131,425 - - - (1,993, - 423) - 7,138,002 - Total Fund Balance $ 11,642,931 $ 618,490 $ 696,923 $ 2,391,099 $ 741,773 $ (1,993,423) $ 202,686 $ 3,245,475 $ 17,545,954 Note 13: Interfund Transactions
a. Due From and To Other Funds
At June 30, 2021, the City had the following short-term interfund receivables and payables:

General Fund City CIP Total
Due to other funds
Non-major Governmental Funds $ 575,815 $ 575,815 - $
Solana Energy Alliance 706,816 31,171 737,987
Total $ 1,282,631 $ 31,171 $ 1,313,802
Due from other funds
Due from/to other funds balances arise from the short-term borrowing made from the City’s General Fund to various other funds to cover cash shortages during the year. 80 CITY OF SOLANA BEACH, CALIFORNIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2021
Note 13: Interfund Transactions (Continued)
b. Interfund Transfers
For the year ended June 30, 2021, the City had the following transfers:

Non-Major
Governmental
Funds
Transfers Out
General Fund $ 283,100
Non-major governmental funds 70,400
$ 353,500
Transfers In
Transfers were made from the General Fund and the Lighting District nonmajor special revenue fund to the City Debt Service nonmajor debt service fund to provide resources for debt service payments. During the fiscal year ended June 30, 2021, there were no significant interfund transfers that were not expected, budgeted for, unusual, nor of a non-routine nature.
c. Advances to, Advances from other funds
On July 11, 2018, the City Council adopted Resolution 2018-069 approving the purchase and sale agreement for 700 Stevens Avenue (“Property”) for $2.8 million; establishing an internal General Fund service fund named “Real Property Acquisition” to receive funds from the Sanitation fund to pay for the acquisition of the Property; and authorizing the transfer of $2.8 million from the Sanitation Fund to the Real Property Acquisition fund as a loan payable to the Sanitation fund at an annual interest rate of 2.78% for seven years with annual payments equal to $445,699.

The City is a built-out coastal community and availability of vacant land is scarce. The Property is three parcels of vacant land totaling approximately 28,978 square feet and is located immediately north of and adjacent to La Colonia Park. The purchase of the Property offered the City an opportunity to expand the existing open space, recreation and park use in the future.

The City has the ability to make this kind of transfer from one fund to another so long as there is no prohibition on the use of the funds. In this case, the Sanitation funds are not specifically prohibited for other uses (except for connection fees, which cannot be used for any other purpose). See Health & Safety Code §§ 5473 et seq.

The City elected to borrow funds from its Sanitation Fund to pay for the purchase of the Property. Repayment to the Sanitation Fund over the seven years of the loan will be as follows:

Year Ending June 30, Principal Interest Total
2022 388,596 $ 57,103$ $ 445,699
2023 399,399 46,300 445,699
2024 410,503 35,196 445,699
2025 421,914 23,785 445,699
2026 433,644 12,055 445,699
Total $ 2,054,056 $ 174,439 $ 2,228,495
81 CITY OF SOLANA BEACH, CALIFORNIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2021
Note 14: Investment in Joint Venture
On June 17, 1987, the Cardiff Sanitation District and the City of Solana Beach established the San Elijo Joint Powers Authority (SEJPA), a separate legal entity, whose function is to manage, operate, maintain, and expand a plant for the treatment and disposal of sewage or wastewater and to determine the joint and separate obligations of the members concerning the transmission, treatment, disposal and reclamation of sewage and wastewater within the respective service territories. The SEJPA's governing board consists of two members from each entity. The City of Solana Beach's investment in the SEJPA has been recorded using the equity method of accounting and is shown as an investment in joint venture in the City's financial statements. Summarized audited information of the SEJPA for the fiscal year ended June 30, 2021, is as follows:

Operating revenues $ 8,794,541
Operating expenses (9,852,449)
Net non-operating income 1,279,386
Capital contributions 1,157,490
Change in net position $ 1,378,968
Total assets and deferred outflows of resources 105,367,985 $ Total liabilities and deferred inflows of resources (34,101,597) Net position- total fund equity $ 71,266,388
Prior to the formation of the San Elijo Joint Powers Authority, the Cardiff Sanitation District and the City of Solana Beach operated the San Elijo water pollution control facility under an agreement whereby operating costs were shared based on usage and capital expansions were funded 56% by Cardiff and 44% by Solana Beach. Upon formation of the SEJPA in June 1987 the members continued funding SEJPA activities in this manner until May 1989, when the equity interests in the joint venture were revised to 50% Cardiff and 50% Solana Beach. To effect the change in equity interests, the City of Solana Beach agreed to pay Cardiff Sanitation District $750,680, which included a premium on the value of the equity interest in the amount of $437,782. This premium is being amortized over the estimated useful life of the facility of forty years.

A summary of the changes in the City's investment in the San Elijo Joint Powers Authority for the year ended June 30, 2021, is as follows:

Investment at June 30, 2020 $ 34,949,555
Capital contribution 578,745
Current year share in the joint venture net income 689,484 Amortization of JPA (662,191)
Investment at June 30, 2021 $ 35,555,593
The financial statements of the SEJPA can be obtained from the Solana Beach Finance Department located at Solana Beach City Hall, 635 S. Highway 101, Solana Beach, California 92075.
82 CITY OF SOLANA BEACH, CALIFORNIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2021
Note 15: Non-City Obligations – Special Assessment Debt Bonds issued to finance public improvement projects in certain assessment districts are liabilities of the property owners and are secured by liens against the assessed property. The City acts as an agent for collection of principal and interest payments by the property owners and remittance of such monies to the bondholders.

The City has no obligation or duty to pay any delinquency out of any available funds of the City.

Neither the faith, credit, nor the taxing power of the City is pledged to the payment of the bonds.

Therefore, none of the following obligations are included in the accompanying basic financial statements.
a. Undergrounding Districts
During July 2006, the Solana Beach Public Financing Authority issued Assessment District Revenue Bonds totaling $2,112,000 (less bond issuance costs of $244,393) to finance the undergrounding of utility lines for the Barbara/Granados Avenue Utility Undergrounding District and the Pacific Avenue/East and West Circle Drive Utility Underground Assessment District. In July 2008, the City of Solana Beach issued $480,000 (less bond issuance costs of $87,775) to finance the undergrounding of utility lines on Marsolan Avenue. The outstanding bonds as of June 30, 2021, were $1,490,000. b. South Solana Sewer District
In November 2006, the Solana Beach Public Financing Authority issued Limited Obligation Improvement Bonds totaling $570,000 (less bond issuance costs of $5,742) to finance the construction of sewer improvements to connect 51 properties of the South Solana Beach Sewer District assessment district to the City’s sewer system. The outstanding bonds as of June 30, 2021, were $405,000.

Note 16: Successor Agency Trust for Assets of Former Redevelopment Agency On December 29, 2011, the California Supreme Court upheld Assembly Bill 1X 26 (“the Bill”) that provides for the dissolution of all redevelopment agencies in the State of California. This action impacted the reporting entity of the City of Solana Beach that previously had reported a redevelopment agency within the reporting entity of the City as a blended component unit.

After enactment of the law, which occurred on June 28, 2011, redevelopment agencies in the State of California cannot enter into new projects, obligations, or commitments. Subject to the control of a newly established oversight board, remaining assets can only be used to pay enforceable obligations in existence at the date of dissolution (including the completion of any unfinished projects that were subject to legally enforceable contractual commitments).

Management believes, in consultation with legal counsel, that the obligations of the former redevelopment agency due to the City are valid enforceable obligations payable by the successor agency trust under the requirements of the Bill. The City’s position on this issue is not a position of settled law and there is considerable legal uncertainty regarding this issue. It is reasonably possible that a legal determination may be made at a later date by an appropriate judicial authority that would resolve this issue unfavorably to the City. 83 CITY OF SOLANA BEACH, CALIFORNIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2021
Note 16: Successor Agency Trust for Assets of Former Redevelopment Agency (Continued) a. Due to City of Solana Beach
The City made a short-term loan in the amount of $22,320 to the Successor Agency for the purpose of covering the Successor Agency’s cash shortage for the fiscal year ended June 30, 2021. This loan is expected to be repaid in the fiscal year ended June 30, 2022. b. Long-Term Debt
The following debt was transferred from the Redevelopment Agency to the Successor Agency as of February 1, 2012, as a result of the dissolution. A description of long-term debt outstanding (excluding defeased debt) of the Successor Agency as of June 30, 2021, follows:

Balance
June 30, 2020 Additions Deletions
Balance
June 30, 2021
Due Within
One Year
Fiduciary Funds:
2017 Tax Allocation
Refuding Bonds $ 2,410,800 $ - $ 120,900 $ 2,289,900 $ 124,900 2017 Tax Allocation Refunding Bonds
On November 10, 2017, the Agency issued the 2017 Tax Allocation Bonds to be used for the purpose of providing funds to the Successor Agency to refund, on a current basis, the Solana Beach Redevelopment Agency, Solana Beach Redevelopment Project, Tax Allocation Bonds, Series and pay the costs of issuing the Bonds. These bonds have an 18-year maturity with the final maturity paid on December 1, 2035 and interest rate of

3.360% Interest on the bonds is payable semi-annually on June 1 and December 1, commencing December 1, 2035.

The annual debt service requirements are as follows:

Year Ending June 30, Principal Interest Total
2022 $ 124,900 $ 75,909 $ 200,809
2023 129,100 71,677 200,777
2024 133,500 67,302 200,802
2025 138,200 62,778 200,978
2026 142,700 58,098 200,798
2027 - 2031 789,800 214,581 1,004,381
2032 - 2036 831,700 71,410 903,110
Total $ 2,289,900 $ 621,755 $ 2,911,655
84 CITY OF SOLANA BEACH, CALIFORNIA

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2021
Note 16: Successor Agency Trust for Assets of Former Redevelopment Agency (Continued) Pledged Revenue
The City pledged, as security for bonds issued, either directly or through the Financing Authority, a portion of tax increment revenue (including Low- and ModerateIncome Housing set-aside and pass-through allocations) that it receives. The bonds issued were to provide financing for various capital projects, accomplish Low- and ModerateIncome Housing projects and to defease previously issued bonds. Assembly Bill 1X 26 provided that upon dissolution of the Redevelopment Agency, property taxes allocated to redevelopment agencies no longer are deemed tax increment but rather property tax revenues and will be allocated first to successor agencies to make payments on the indebtedness incurred by the dissolved redevelopment agency. Total principal and interest remaining on the debt is $2,911,655 with annual debt service requirements as indicated above. For the current year, the total property tax revenue recognized by the City for the payment of indebtedness incurred by the dissolved redevelopment agency was $136,847 and the debt service obligation on the bonds was $200,905. c. Insurance
The Successor Agency is covered under the City of Solana Beach’s insurance policies.

Therefore, the limitation and self-insured retentions applicable to the City also apply to the Successor Agency. Additional information as to coverage and self-insured retentions can be found in Note 10.
85 THIS PAGE INTENTIONALLY LEFT BLANK
86 5(48,5('6833/(0(17$5<
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87 CITY OF SOLANA BEACH, CALIFORNIA

BUDGETARY COMPARISON SCHEDULE

GENERAL FUND
FOR THE YEAR ENDED JUNE 30, 2021
(With comparative totals for the year ended June 30, 2020) 2020
Variance with
Final Budget
Budget Amounts Actual Positive Actual
Original Final Amounts (Negative) Amounts
Budgetary Fund Balance, July 1 $ 15,454,078 15,454,078 $ 15,454,078 $ - $ $ 13,833,279 Resources (Inflows):

Taxes:

Property 8,586,500 8,701,500 8,748,270 46,770 8,300,130 Transient occupancy 1,004,400 1,224,400 1,120,889 (103,511) 1,120,664 Sales 3,493,000 3,333,000 3,689,566 356,566 3,291,805
Franchise and other 1,990,200 3,808,700 3,956,645 147,945 1,933,499 Licenses and permits 423,800 323,800 521,627 97,827 337,922 Intergovernmental 1,906,500 97,000 137,613 40,613 2,033,269 Charges for services 674,500 574,500 1,006,034 331,534 1,110,059 Use of money and property 306,000 261,000 590,097 284,097 725,551 Fines and forfeitures 306,000 396,000 244,331 (61,669) 359,703 Miscellaneous 2,622,000 2,637,000 3,026,680 389,680 3,525,458 Amounts Available for Appropriations 36,611,978 36,965,978 38,495,830 1,529,852 36,571,339 Charges to Appropriations (Outflows):

General Government:

City Council 322,500 322,500 338,199 (15,699) 328,172
City Clerk 649,500 700,600 597,329 52,171 446,243
Legal Services 476,700 476,700 274,062 202,638 348,069
City Manager 523,276 406,300 500,676 22,600 374,001
Finance 1,375,500 1,465,500 1,397,212 68,288 1,445,974
Personnel 256,675 236,900 242,946 13,729 219,862
Information Systems 433,900 423,900 441,386 (7,486) 393,313 Support Services 1,392,000 1,388,000 1,240,458 147,542 1,142,745 Total General Government 5,334,400 5,516,051 5,032,268 483,783 4,698,379 Public Safety:

Marine safety 1,006,400 1,023,700 1,047,161 (23,461) 941,300 Law enforcement 4,495,600 4,499,600 4,492,116 7,484 4,322,787 Code & parking enforcement 236,600 236,600 189,513 47,087 207,168 Fire department 5,099,700 5,099,700 5,003,705 95,995 5,082,555 Animal regulation 92,900 88,600 90,075 2,825 85,142
Civil defense 260,300 235,300 258,861 1,439 225,936
Environmental services - 1,100 - - 1,000
Total Public Safety 11,163,300 11,212,800 11,081,431 131,369 10,865,888 Public Works:

Street and other 1,639,500 1,867,900 1,651,923 215,977 1,551,966 Engineering 401,100 415,900 415,781 (14,681) 398,926
Public Facilities 93,000 335,300 87,687 5,313 453,465
Total Public Works 2,390,700 2,362,000 2,155,391 206,609 2,404,357 Community Development:

Planning 751,900 745,900 714,712 37,188 798,376
Building services 433,900 283,900 543,866 (109,966) 593,848 Total Community Development 1,029,800 1,185,800 1,258,578 (72,778) 1,392,224 Community Services:

Community services 88,600 88,600 74,730 13,870 75,763
Recreation programs 595,900 603,400 557,041 38,859 660,122 Total Community Services 692,000 684,500 631,771 52,729 735,885 Capital Outlay 1,005,723 388,000 507,337 498,386 291,013 Total Charges to Appropriations 20,998,200 21,966,874 20,666,776 1,300,098 20,387,746 Other Financing Sources (Uses):

Transfers in 80,000 80,000 - (80,000) -
Transfers out (283,100) (283,100) (283,100) - (729,515) Total Other Financing Sources (Uses) (203,100) (203,100) (283,100) (80,000) (729,515) Budgetary Fund Balance, June 30 $ 15,410,678 $ 14,796,004 $ 17,545,954 $ 2,749,950 $ 15,454,078 2021
See Notes to Required Supplementary Information.
88 CITY OF SOLANA BEACH, CALIFORNIA

BUDGETARY COMPARISON SCHEDULE

TRANSNET FUND
FOR THE YEAR ENDED JUNE 30, 2021
(With comparative totals for the year ended June 30, 2020) 2020
Variance with
Final Budget
Budget Amounts Actual Positive Actual
Original Final Amounts (Negative) Amounts
Budgetary Fund Balance, July 1 $ 90,332 90,332 $ 90,332 $ - $ $ 23,194 Resources (Inflows):

Service fees - - 10,869 10,869 7,246
Intergovernmental 144,400 144,400 395,105 250,705 601,705 Use of money and property - - 576 576 6,142
Amounts Available for Appropriations 234,732 234,732 496,882 262,150 638,287 Charges to Appropriations (Outflows):

Public works 75,000 75,000 3,251 71,749 461
Capital outlay 233,892 144,400 117,579 116,313 222,389
Debt service:

Interest and fiscal charges - - ( 325,105 325,105) 325,105 Total Charges to Appropriations 219,400 308,892 445,935 (137,043) 547,955 Budgetary Fund Balance, June 30 $ 15,332 $ (74,160) $ 50,947 $ 125,107 $ 90,332 2021
See Notes to Required Supplementary Information.
89 CITY OF SOLANA BEACH, CALIFORNIA

SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY

MISCELLANEOUS EMPLOYEES PENSION PLAN

LAST TEN YEARS
JUNE 30, 2021
2021 2020 2019 2018 2017
City of Solana Beach's Proportion
of the Net Pension Liability 0.05654% 0.05532% 0.05550% 0.05313% 0.05241% City of Solana Beach's Proportionate
Share of the Net Pension Liability $ 6,151,557 $ 5,668,839 $ 5,177,151 $ 5,268,836 $ 4,534,940 City of Solana Beach's Miscellaneous
Employees Plan Covered Payroll $ 3,312,829 $ 3,058,602 $ 2,879,582 $ 2,721,499 $ 2,593,359 City of Solana Beach's Proportionate
Share of the Net Pension Liability as a
Percentage of the Miscellaneous
Employees Plan Covered Payroll 185.69% 185.34% 179.79% 193.60% 174.87% Plan Fiduciary Net Position as a
Percentage of the Total Pension Liability 75.10% 75.26% 75.26% 72.59% 75.87% 2016 2015
City of Solana Beach's Proportion
of the Net Pension Liability 0.05706% 0.04245%
City of Solana Beach's Proportionate
Share of the Net Pension Liability $ 3,550,604 $ 2,651,591 City of Solana Beach's Miscellaneous
Employees Plan Covered Payroll $ 2,409,776 $ 2,517,165
City of Solana Beach's Proportionate
Share of the Net Pension Liability as a
Percentage of the Miscellaneous
Employees Plan Covered Payroll 147.34% 105.34%
Plan Fiduciary Net Position as a
Percentage of the Total Pension Liability 79.82% 78.40% See Notes to Required Supplementary Information.
90 CITY OF SOLANA BEACH, CALIFORNIA

SCHEDULE OF EMPLOYER'S CONTRIBUTIONS

MISCELLANEOUS EMPLOYEES PENSION PLAN

LAST TEN YEARS
JUNE 30, 2021
2021 2020 2019 2018 2017
Actuarially Determined Contribution $ 685,457 $ 636,152 $ 541,582 $ 460,816 $ 417,318 Contribution in Relation to the Actuarially
Determined Contribution 685,457 636,152 541,582 460,816 417,318 Contribution Excess (Deficiency) $ - $ - $ - $ - $ -
City of Solana Beach's Miscellaneous
Employees Plan Covered Payroll $ 3,353,666 $ 3,312,829 $ 3,058,602 $ 2,879,582 $ 2,721,499 City of Solana Beach's Contributions as a
Percentage of the Miscellaneous Employees 20.44% 19.20% 17.71% 16.00% 15.33% Plan Covered Payroll
2016 2015
Actuarially Determined Contribution $ 385,634 $ 330,415 Contribution in Relation to the Actuarially
Determined Contribution 385,634 330,415
Contribution Excess (Deficiency) $ - $ -
City of Solana Beach's Miscellaneous
Employees Plan Covered Payroll $ 2,593,359 $ 2,409,776
City of Solana Beach's Contributions as a
Percentage of the Miscellaneous Employees 14.87% 13.71% Plan Covered Payroll
See Notes to Required Supplementary Information.
91 CITY OF SOLANA BEACH, CALIFORNIA

SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY

SAFETY EMPLOYEES PENSION PLAN

LAST TEN YEARS
JUNE 30, 2021
2021 2020 2019 2018 2017
City of Solana Beach's Proportion
of the Net Pension Liability 0.09655% 0.09380% 0.09361% 0.08816% 0.08774% City of Solana Beach's Proportionate
Share of the Net Pension Liability $ 10,505,198 $ 9,611,934 $ 8,884,523 $ 8,742,997 $ 7,592,101 City of Solana Beach's Safety
Employees Plan Covered Payroll $ 2,389,544 $ 2,270,208 $ 2,249,144 $ 2,115,191 $ 2,116,065 City of Solana Beach's Proportionate
Share of the Net Pension Liability as a
Percentage of the Safety
Employees Plan Covered Payroll 439.63% 423.39% 395.02% 413.34% 358.78% Plan Fiduciary Net Position as a
Percentage of the Total Pension Liability 75.10% 75.26% 75.26% 72.59% 75.87% 2016 2015
City of Solana Beach's Proportion
of the Net Pension Liability 0.09490% 0.07208%
City of Solana Beach's Proportionate
Share of the Net Pension Liability $ 5,905,301 $ 4,940,589 City of Solana Beach's Safety
Employees Plan Covered Payroll $ 1,997,991 $ 1,925,616
City of Solana Beach's Proportionate
Share of the Net Pension Liability as a
Percentage of the Safety
Employees Plan Covered Payroll 295.56% 256.57%
Plan Fiduciary Net Position as a
Percentage of the Total Pension Liability 79.82% 78.40% See Notes to Required Supplementary Information.
92 CITY OF SOLANA BEACH, CALIFORNIA

SCHEDULE OF EMPLOYER'S CONTRIBUTIONS

SAFETY EMPLOYEES PENSION PLAN

LAST TEN YEARS
JUNE 30, 2021
2021 2020 2019 2018 2017
Actuarially Determined Contribution $ 1,045,632 $ 988,753 $ 838,065 $ 717,659 $ 673,212 Contribution in Relation to the Actuarially
Determined Contribution 1,045,632 988,753 838,065 717,659 673,212 Contribution Excess (Deficiency) $ - $ - $ - $ - $ -
City of Solana Beach's Miscellaneous
Employees Plan Covered Payroll $ 2,138,322 $ 2,389,544 $ 2,270,208 $ 2,249,144 $ 2,115,191 City of Solana Beach's Contributions as a
Percentage of the Miscellaneous Employees 48.90% 41.38% 36.92% 31.91% 31.83% Plan Covered Payroll
2016 2015
Actuarially Determined Contribution $ 619,022 $ 519,933 Contribution in Relation to the Actuarially
Determined Contribution 619,022 519,933
Contribution Excess (Deficiency) $ - $ -
City of Solana Beach's Miscellaneous
Employees Plan Covered Payroll $ 2,116,065 $ 1,997,991
City of Solana Beach's Contributions as a
Percentage of the Miscellaneous Employees 29.25% 26.02% Plan Covered Payroll
See Notes to Required Supplementary Information.
93 CITY OF SOLANA BEACH, CALIFORNIA

SCHEDULE OF CHANGES IN NET OPEB LIABILITY AND RELATED RATIOS

RETIREE HEALTHCARE PLAN

LAST FIVE FISCAL YEARS
2021 2020 2019 2018 2017

TOTAL OPEB LIABILITY
Service Cost $ 140,334 115,154 $ 218,793 $ 231,577 $ $ 225,000 Interest 231,171 210,592 187,559 172,035 164,000
Actual vs. expected experience (42,558) - - - -
Assumption changes (384,986) - (1,145,939) (242,883) -
Benefit payments (275,453) (248,040) (230,041) (219,042) (148,000) Net Changes (304,079) 50,293 ( (58,313) 969,628) 241,000 Total OPEB Liability - Beginning 3,532,448 3,836,527 4,806,155 4,864,468 4,623,000 Total OPEB Liability - Ending (a) $ 3,582,741 $ 3,532,448 $ 3,836,527 $ 4,806,155 $ 4,864,000

PLAN FIDUCIARY NET POSITION
Contributions - employer (2) $ 446,751 480,132 $ 484,191 $ 307,582 $ 233,000 $ Net investment income 20,418 210,366 27,769 23,652 17,000 Benefit payments (275,453) (248,040) (227,210) (219,042) (148,000) Administrative expenses (4,056) (3,382) (2,496) (2,062) - Other changes - (1,390) - - -
Net Changes 215,073 410,273 282,254 110,130 102,000
Plan Fiduciary Net Position - Beginning 633,535 848,608 351,281 241,151 139,000 Plan Fiduciary Net Position - Ending (b) $ 1,258,881 $ 848,608 $ 633,535 $ 351,281 $ 241,000 PLAN NET OPEB LIABILITY - ENDING (a) - (b) 2,323,860 $ 2,683,840 $ 3,202,992 $ 4,454,874 $ 4,623,000 $

35.1% 24.0% 16.5% 7.3% 5.0%
City of Solana Beach's Retiree Healthcare Plan Covered-Employee Payroll $ 7,533,033 $ 7,506,736 $ 7,050,741 $ 6,666,082 $ 6,406,137 as a Percentage of Retiree Healthcare Plan Covered-Employee Payroll 30.8% 35.8% 45.4% 66.8% 72.2% Retiree Healthcare Plan Fiduciary Net Position
JUNE 30, 2021
as a Percentage of the Plan Total OPEB Liability
City of Solana Beach's Net Retiree Healthcare Plan OPEB Libility See Notes to Required Supplementary Information.
94 CITY OF SOLANA BEACH, CALIFORNIA

SCHEDULE OF EMPLOYER CONTRIBUTIONS

RETIREE HEALTHCARE PLAN

LAST FIVE FISCAL YEARS
JUNE 30, 2021
2021 2020 2019 2018 2017
Retiree Healthcare Plan Actuarially Determined Contribution $ 378,000 389,000 $ 484,191 $ 220,491 $ $ 531,000 Retiree Healthcare Plan Contributions in Relation to the Actuarially Determined Contribution 446,751 480,132 484,191 252,055 233,000 Contribution Excess (Deficiency) $ 68,751 91,132 $ - $ 31,564 $ $ (298,000) Retiree Healthcare Plan Covered-Employee Payroll $ 7,533,033 $ 7,506,736 $ 7,050,741 $ 6,666,082 $ 6,406,137 City of Solana Beach Contributions as a Percentage
of Retiree Healthcare Plan Covered-Employee Payroll -6.4% -6.0% -6.9% -3.8% -3.6% See Notes to Required Supplementary Information.
95 CITY OF SOLANA BEACH, CALIFORNIA

SCHEDULE OF INVESTMENT RETURNS

RETIREE HEALTHCARE PLAN

LAST FIVE FISCAL YEARS
JUNE 30, 2021
2021 2020 2019 2018 2017
Retiree Healthcare Plan Annual Money-Weighted
Rate of Return, Net of Investment Expense 21.40% 3.97% 5.94% 5.62% 10.55% See Notes to Required Supplementary Information.
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0RUWDOLW\SURMHFWHGIXOO\JHQHUDWLRQDOZLWK6FDOH03 98 SUPPLEMENTARY INFORMATION
99 CDBG Fund - accounts for the revenues and expenditures of the Community Development Block Grant program.

Coastal Area Business/Visitor Assistance and Enhancement Fund - this fund is for expenditures that include local visitor and business promotion such as assistance to the Chamber of Commerce and North County Convention and Visitor's Bureau, special events such as the Fiesta Del Sol, public art, and visitor enhancements to the Highway 101 business corridor or the Cedros Design District.

Transportation Development Act - accounts for the revenues and expenditures of the Transportation Development Act.

NON-MAJOR

GOVERNMENTAL FUNDS
Municipal Improvement Districts Fund - accounts for receipts and expenditure related to landscape maintenance within the various improvement districts. Budgets for maintenance cost are determined by property owners who are then assessed on a per parcel basis. The assessments are collected via the County tax roll.

Fire Mitigation Fund - accounts for fire mitigation fees collected during new structural development based on construction type and size. The fees are restricted to equipment purchases only.

COPS Fund - accounts for federal and state grants received for police services.

Lighting District Fund - accounts for the revenues received and expenditures made related to street lights on the City's streets. The City determines the yearly budget and property owners are charged their proportionate share based on a per unit basis. The assessments are collected via the County tax roll.

Gas Tax Fund - accounts for revenues received and expenditures made for street related activities. Revenues are received from the State of California for the City's share of gasoline taxes pursuant to California Streets and Highways Code Sections 2105, 2106, 2107 and 2107.5.

Public Safety Fund - accounts for federal and state grants received for public safety. 100

NON-MAJOR

GOVERNMENTAL FUNDS
Developer Pass-Thru Fund - accounts for resources reserved to developer deposits.

Assessment Districts CIP Fund - accounts for capital projects in the assessment districts.

Sand Replenish / Retention and Coastal CIP - is limited to sand replenishment, sand retention, and coastal improvement project. Seewall expenditures are excluded from this CIP fund.

Camp Programs Fund - accounts for camp programs in the City.

SB1 Streets & Roads - accounts for revenues received and expenditures made for street related activities.

Revenues are received from the State of California for the City's share of SB1 taxes pursuant.

Housing Fund - accounts for resources reserved to provide for low and moderate income housing.

Boating and Waterways Fund - accounts for grants received from the Department of Boating and Waterways.

These funds are being used to fund the US Army Corps of Engineers beach replenishment study.

City Debt Service Fund - accounts for debt service in the City.

Miscellaneous Grants Fund - accounts for grant received to fund various ongoing capital projects. 101

CITY OF SOLANA BEACH, CALIFORNIA

COMBINING BALANCE SHEET

NONMAJOR GOVERNMENTAL FUNDS
JUNE 30, 2021
(With comparative totals for June 30, 2020)
2021 2020 2021 2020
ASSETS
Cash and investments $ 6, 7,869,546 $ 1, 976,742 $ 032,990 $ 1,090,034 Receivables:

Accounts 279,668 74,320 - -
Interest 19,803 20,040 2,801 3,005
Intergovernmental 357,734 286,637 - -
Inventories 47,545 47,545 - -
Total Assets $ 8,574,296 $ 7,405,284 $ 1,035,791 $ 1,093,039

LIABILITIES
Accounts payable $ 156,771 156,768 $ 25,920 $ $ 23,351
Accrued liabilities 6,454 27,749 - -
Unearned revenues 395,889 408,022 - -
Deposits payable - - 69,226 69,226
Due to other funds 527,149 575,815 - -
Total Liabilities 1, 1,168,354 95,146 086,263 92,577

DEFERRED INFLOWS OF RESOURCES
Unavailable revenues - 327,767 - -
Total Deferred Inflows of Resources - 327,767 - -

FUND BALANCES
Restricted 6, 7,496,024 376,889 987,063 1,000,462
Unassigned (58, (417,849) (46,418) 138) -
Total Fund Balances 6, 7,078,175 318,751 940,645 1,000,462 Total Liabilities, Deferred Inflows
of Resources and Fund Balances $ 8,574,296 $ 7,405,014 $ 1,035,791 $ 1,093,039 Special Revenue Funds Capital Projects Funds
102

CITY OF SOLANA BEACH, CALIFORNIA

COMBINING BALANCE SHEET

NONMAJOR GOVERNMENTAL FUNDS
JUNE 30, 2021
(With comparative totals for June 30, 2020)
ASSETS
Cash and investments
Receivables:

Accounts
Interest
Intergovernmental
Inventories
Total Assets

LIABILITIES
Accounts payable
Accrued liabilities
Unearned revenues
Deposits payable
Due to other funds
Total Liabilities

DEFERRED INFLOWS OF RESOURCES
Unavailable revenues
Total Deferred Inflows of Resources

FUND BALANCES
Restricted
Unassigned
Total Fund Balances
Total Liabilities, Deferred Inflows
of Resources and Fund Balances
2021 2020 2021 2020
$ 25,754 $ 21,955 $ 8,928,290 $ 8,088,731
- - 279,668 74,320
- - 22,604 23,045
- - 357,734 286,637
- - 47,545 47,545
$ 21,955 25,754 $ 9,635,841 $ 8,520,278 $
$ - $ - $ 182,688 $ 180,122
- - 27,749 6,454
- - 408,022 395,889
- - 69,226 69,226
- - 575,815 527,149
- 1,263,500 - 1,178,840
- - 327,767 -
- - 327,767 -
21,955 25,754 8,508,841 7,399,306
- (464,267) - (58,138)
21,955 25,754 8,044,574 7,341,168
$ 21,955 25,754 $ 9,635,841 $ 8,520,008 $
Debt Service Funds
Total Nonmajor Governmental
Funds
103

CITY OF SOLANA BEACH, CALIFORNIA

COMBINING BALANCE SHEET

NONMAJOR GOVERNMENTAL FUNDS
JUNE 30, 2021
(With comparative totals for June 30, 2020)
ASSETS
Cash and investments $ 1,296,641 443,421 $ 3,087,497 $ 373,294 $ $ 343,252 Receivables:

Accounts - - - - 84,461
Interest 1,130 3,473 9,403 1,001 -
Intergovernmental - 5,034 4,372 - -
Inventories - - - - -
Total Assets $ 444,551 $ 1,305,148 $ 3,101,272 $ 374,295 $ 427,713

LIABILITIES
Accounts payable $ 39,009 18,610 $ 22,139 $ 36,376 $ $ 3,785 Accrued liabilities - - 2,777 - 1,671
Unearned revenues - - - - -
Deposits payable - - - - -
Due to other funds - - - - -
Total Liabilities 39,009 18,610 24,916 36,376 5,456

DEFERRED INFLOWS OF RESOURCES
Unavailable revenues - - - - 26,187
Total Deferred Inflows of Resources - - - - 26,187

FUND BALANCES
Restricted 1,266,139 425,941 3,076,356 337,919 396,070
Unassigned - - - - -
Total Fund Balances 1,266,139 425,941 3,076,356 337,919 396,070 Total Liabilities, Deferred Inflows
of Resources and Fund Balances $ 444,551 $ 1,305,148 $ 3,101,272 $ 374,295 $ 427,713 Gas Tax COPS Public Safety
Municipal
Improvement
Districts Lighting District
Special Revenue Funds
104

CITY OF SOLANA BEACH, CALIFORNIA

COMBINING BALANCE SHEET

NONMAJOR GOVERNMENTAL FUNDS
JUNE 30, 2021
(With comparative totals for June 30, 2020)
ASSETS
Cash and investments
Receivables:

Accounts
Interest
Intergovernmental
Inventories
Total Assets

LIABILITIES
Accounts payable
Accrued liabilities
Unearned revenues
Deposits payable
Due to other funds
Total Liabilities

DEFERRED INFLOWS OF RESOURCES
Unavailable revenues
Total Deferred Inflows of Resources

FUND BALANCES
Restricted
Unassigned
Total Fund Balances
Total Liabilities, Deferred Inflows
of Resources and Fund Balances

(CONTINUED)
$ - 12,275 $ $ - $ 878,961 $ -
1,759 154,265 - - -
- - - 2,483 -
- - - - 301,580
- - - - -
$ 14,034 $ - 154,265 $ 881,444 $ $ 301,580
$ - $ 21,265 $ - $ 9 $ -
- - - - -
- - - - -
- - - - -
- 236,489 16,660 - 297,613
- 257,754 16,660 9 297,613
- - - - 301,580
- - - - 301,580
- 14,034 - 881,435 -
- (103,489) (16,660) - (297,613)
14,034 (103,489) (16,660) 881,435 (297,613)
$ 14,034 $ - 154,265 $ 881,444 $ $ 301,580
Coastal Area
Business /
Visitor
Assistance &
Enhancement
Boating &
Fire Mitigation Waterways
Transportation
Development Act CDBG
Special Revenue Funds
105

CITY OF SOLANA BEACH, CALIFORNIA

COMBINING BALANCE SHEET

NONMAJOR GOVERNMENTAL FUNDS
JUNE 30, 2021
(With comparative totals for June 30, 2020)
ASSETS
Cash and investments
Receivables:

Accounts
Interest
Intergovernmental
Inventories
Total Assets

LIABILITIES
Accounts payable
Accrued liabilities
Unearned revenues
Deposits payable
Due to other funds
Total Liabilities

DEFERRED INFLOWS OF RESOURCES
Unavailable revenues
Total Deferred Inflows of Resources

FUND BALANCES
Restricted
Unassigned
Total Fund Balances
Total Liabilities, Deferred Inflows
of Resources and Fund Balances

$ 190,627 $ 414,999 $ 645,233 $ - $ 183,346
- - - 39,183 -
- - 1,983 - 330
- - - - 46,748
- - - 47,545 -
$ 190,627 $ 647,216 414,999 $ 86,728 $ $ 230,424
$ 1,742 $ 7,064 $ 52 $ 6,717 $ -
- - - 23,301 -
- 408,022 - - -
- - - - -
- - - 25,053 -
1,742 415,086 52 55,071 -
- - - - -
- - - - -
- 188,885 647,164 31,657 230,424
- (87) - - -
188,885 (87) 647,164 31,657 230,424
$ 190,627 $ 647,216 414,999 $ 86,728 $ $ 230,424
Camp Programs
SB1 Streets &
Roads
Miscellaneous
Grants
Developer PassThru Housing
Special Revenue Funds
106

CITY OF SOLANA BEACH, CALIFORNIA

COMBINING BALANCE SHEET

NONMAJOR GOVERNMENTAL FUNDS
JUNE 30, 2021
(With comparative totals for June 30, 2020)
ASSETS
Cash and investments
Receivables:

Accounts
Interest
Intergovernmental
Inventories
Total Assets

LIABILITIES
Accounts payable
Accrued liabilities
Unearned revenues
Deposits payable
Due to other funds
Total Liabilities

DEFERRED INFLOWS OF RESOURCES
Unavailable revenues
Total Deferred Inflows of Resources

FUND BALANCES
Restricted
Unassigned
Total Fund Balances
Total Liabilities, Deferred Inflows
of Resources and Fund Balances

Debt Service
Funds
2021 2020
$ 39,452 $ 993,538 $ 25,754 $ 8,928,290 $ 8,088,731
- - - 279,668 74,050
- 2,801 - 22,604 23,045
- - - 357,734 286,637
- - - 47,545 47,545
$ 996,339 39,452 $ 25,754 $ 9,635,841 $ 8, $ 520,008
$ 16,644 $ 9,276 $ - $ 182,688 $ 180,122
- - - 27,749 6,454
- - - 408,022 395,889
- 69,226 - 69,226 69,226
- - - 575,815 527,149
85,870 9,276 - 1,263,500 1,178,840
- - - 327,767 -
- - - 327,767 -
- 987,063 25,754 8,508,841 7,399,306
(46,418) - - ( 464,267) (58,138)
(46,418) 987,063 25,754 8,044,574 7,341,168
$ 996,339 39,452 $ 25,754 $ 9,635,841 $ 8, $ 520,008
City Debt
Service
Sand Replenish/
Retention and
Coastal Access
CIP
Assessment
Districts CIP
Capital Projects Funds Total Nonmajor Governmental Funds 107

CITY OF SOLANA BEACH, CALIFORNIA

COMBINING STATEMENT OF REVENUES,

EXPENDITURES AND CHANGES IN FUND BALANCES

NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2021
(With comparative totals for the year ended June 30, 2020) 2021 2020 2021 2020

REVENUES
Taxes and assessments $ 1,972,220 2,036,106 $ 224,178 $ $ 224,155 Intergovernmental 649,949 1,383,946 - -
Charges for services 372,964 115,549 - -
Use of money and property 239,111 35,933 (60,819) 34,835 Other revenues 16,495 884 - -
Total Revenues 2,993,324 3,829,833 163,359 258,990

EXPENDITURES
Current:

Public safety 596,013 1,333,556 123,920 98,107
Public works 962,000 953,601 - -
Community development 89,044 107,181 99,256 -
Community services 49,211 68,025 - -
Capital outlay 566,198 833,321 - 63,654
Debt service:

Principal retirement - - - -
Interest and fiscal charges - - - -
Total Expenditures 2,558,141 3,000,009 223,176 161,761
Excess (Deficiency) of Revenue
Over (Under) Expenditures 829,824 435,183 (59,817) 97,229

OTHER FINANCING SOURCES (USES)
Transfers in 346,415 - - -
Transfers out (70,400) (70,400) - -
Total Other Financing Sources (Uses) 276,015 (70,400) - - Net Change in Fund Balance 759,424 711,198 (59,817) 97,229 Fund Balance - Beginning 5,607,553 6,318,751 1,000,462 903,233 Fund Balance - Ending $ 7,078,175 $ 6,318,751 $ 940,645 $ 1,000,462 Special Revenue Funds Capital Projects Funds
108

CITY OF SOLANA BEACH, CALIFORNIA

COMBINING STATEMENT OF REVENUES,

EXPENDITURES AND CHANGES IN FUND BALANCES

NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2021
(With comparative totals for the year ended June 30, 2020)

REVENUES
Taxes and assessments
Intergovernmental
Charges for services
Use of money and property
Other revenues
Total Revenues

EXPENDITURES
Current:

Public safety
Public works
Community development
Community services
Capital outlay
Debt service:

Principal retirement
Interest and fiscal charges
Total Expenditures
Excess (Deficiency) of Revenue
Over (Under) Expenditures

OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
Total Other Financing Sources (Uses)
Net Change in Fund Balance
Fund Balance - Beginning
Fund Balance - Ending
2021 2020 2021 2020
$ - - $ 2,260,284 $ $ 2,196,375
- - 1,383,946 649,949
- - 372,964 115,549
- - (24,886) 273,946
- - 884 16,495
- - 3,993,192 3,252,314
- - 1,457,476 694,120
- - 962,000 953,601
- - 188,300 107,181
- - 49,211 68,025
- - 566,198 896,975
319,071 316,505 319,071 316,505
30,630 40,134 30,630 40,134
349,701 356,639 3,572,886 3,076,541
(356,639) (349,701) 420,306 175,773
353,500 353,500 353,500 699,915
- - (70,400) (70,400)
353,500 353,500 283,100 629,515
(3,139) 3,799 703,406 805,288
25,094 21,955 7,341,168 6,535,880
$ 21,955 25,754 $ 8,044,574 $ 7,341,168 $
Debt Service Funds
Total Nonmajor Governmental
Funds
109

CITY OF SOLANA BEACH, CALIFORNIA

COMBINING STATEMENT OF REVENUES,

EXPENDITURES AND CHANGES IN FUND BALANCES

NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2021
(With comparative totals for the year ended June 30, 2020)

REVENUES
Taxes and assessments $ 710,306 310,442 $ 646,733 $ - $ $ - Intergovernmental 2,749 10,000 3,231 232,674 454,707
Charges for services - - - - -
Use of money and property 4,818 7,122 21,468 3,179 -
Other revenues - - - - 884
Total Revenues 717,873 327,564 671,432 235,853 455,591

EXPENDITURES
Current:

Public safety - - - 148,877 313,595
Public works 2,924 605,495 325,839 - -
Community development - - - - -
Community services - - - - -
Capital outlay - 96,533 - - 24,677
Debt service:

Principal retirement - - - - -
Interest and fiscal charges - - - - -
Total Expenditures 605,495 99,457 325,839 148,877 338,272 Excess (Deficiency) of Revenue
Over (Under) Expenditures 112,378 228,107 345,593 86,976 117,319

OTHER FINANCING SOURCES (USES)
Transfers in - - - - -
Transfers out - - (70,400) - -
Total Other Financing Sources (Uses) - - (70,400) - -
Net Change in Fund Balance 112,378 228,107 275,193 86,976 117,319 Fund Balance - Beginning 1,153,761 197,834 2,801,163 250,943 278,751 Fund Balance - Ending $ 425,941 $ 1,266,139 $ 3,076,356 $ 337,919 $ 396,070 Special Revenue Funds
Gas Tax COPS Public Safety
Municipal
Improvement
Districts Lighting District
110

CITY OF SOLANA BEACH, CALIFORNIA

COMBINING STATEMENT OF REVENUES,

EXPENDITURES AND CHANGES IN FUND BALANCES

NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2021
(With comparative totals for the year ended June 30, 2020)

REVENUES
Taxes and assessments
Intergovernmental
Charges for services
Use of money and property
Other revenues
Total Revenues

EXPENDITURES
Current:

Public safety
Public works
Community development
Community services
Capital outlay
Debt service:

Principal retirement
Interest and fiscal charges
Total Expenditures
Excess (Deficiency) of Revenue
Over (Under) Expenditures

OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
Total Other Financing Sources (Uses)
Net Change in Fund Balance
Fund Balance - Beginning
Fund Balance - Ending
(CONTINUED)
$ - - $ - $ 112,089 $ $ -
167,872 - - - 91,545
- 27,078 - - -
- - - 5,165 (1,387)
- - - - -
167,872 27,078 - 117,254 90,158
- 5,606 743 - 450,000
- - - - -
- - - 25,821 -
- - - - -
236,665 - - - -
- - - - -
- - - - -
236,665 5,606 743 25,821 450,000
(68,793) 21,472 (743) 91,433 (359,842)
- - - - -
- - - - -
- - - - -
(68,793) 21,472 (743) 91,433 (359,842)
(34,696) (7,438) (15,917) 790,002 62,229
$ (103,489) 14,034 $ (16,660) $ 881,435 $ (297,613) $
Special Revenue Funds
Coastal Area
Business /
Visitor
Assistance &
Enhancement
Boating &
Fire Mitigation Waterways
Transportation
Development Act CDBG
111

CITY OF SOLANA BEACH, CALIFORNIA

COMBINING STATEMENT OF REVENUES,

EXPENDITURES AND CHANGES IN FUND BALANCES

NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2021
(With comparative totals for the year ended June 30, 2020)

REVENUES
Taxes and assessments
Intergovernmental
Charges for services
Use of money and property
Other revenues
Total Revenues

EXPENDITURES
Current:

Public safety
Public works
Community development
Community services
Capital outlay
Debt service:

Principal retirement
Interest and fiscal charges
Total Expenditures
Excess (Deficiency) of Revenue
Over (Under) Expenditures

OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
Total Other Financing Sources (Uses)
Net Change in Fund Balance
Fund Balance - Beginning
Fund Balance - Ending
$ - - $ - $ - $ $ 256,536
421,168 - - - -
74,423 - - 271,463 -
(142) (12,149) 10,848 - (2,989)
- - - - -
62,274 421,026 10,848 271,463 253,547
- 210,639 - 204,096 -
- 27,742 - - -
62,274 - 949 - -
- - - 49,211 -
- - - - 208,323
- - - - -
- - - - -
62,274 238,381 949 253,307 208,323
- 182,645 9,899 18,156 45,224
- - - - -
- - - - -
- - - - -
- 182,645 9,899 18,156 45,224
(87) 6,240 637,265 13,501 185,200
$ (87) 188,885 $ 647,164 $ 31,657 $ 230,424 $
Special Revenue Funds
Camp Programs
SB1 Streets &
Roads
Miscellaneous
Grants
Developer PassThru Housing
112

CITY OF SOLANA BEACH, CALIFORNIA

COMBINING STATEMENT OF REVENUES,

EXPENDITURES AND CHANGES IN FUND BALANCES

NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2021
(With comparative totals for the year ended June 30, 2020)

REVENUES
Taxes and assessments
Intergovernmental
Charges for services
Use of money and property
Other revenues
Total Revenues

EXPENDITURES
Current:

Public safety
Public works
Community development
Community services
Capital outlay
Debt service:

Principal retirement
Interest and fiscal charges
Total Expenditures
Excess (Deficiency) of Revenue
Over (Under) Expenditures

OTHER FINANCING SOURCES (USES)
Transfers in
Transfers out
Total Other Financing Sources (Uses)
Net Change in Fund Balance
Fund Balance - Beginning
Fund Balance - Ending
Debt Service
Funds
2021 2020
$ - $ 224,178 $ 2,260,284 - $ $ 2,196,375
- - 1,383,946 - 649,949
- - - 372,964 115,549
6,712 (67,531) - (24,886) 273,946
- - - 884 16,495
230,890 (67,531) - 3,993,192 3,252,314
123,920 - - 1,457,476 694,120
- - - 962,000 953,601
- 99,256 - 188,300 107,181
- - - 49,211 68,025
- - - 566,198 896,975
- - 319,071 319,071 316,505
- - 30,630 30,630 40,134
123,920 99,256 349,701 3,572,886 3,076,541
106,970 (166,787) (349,701) 420,306 175,773
- - 353,500 353,500 699,915
- - - (70,400) (70,400)
- - 353,500 283,100 629,515
106,970 (166,787) 3,799 703,406 805,288
880,093 120,369 21,955 7,341,168 4,927,549
$ 987,063 (46,418) $ 25,754 $ 8,044,574 $ 7,341,168 $
City Debt Service
Sand Replenish/
Retention and
Coastal Access
CIP
Assessment
Districts CIP
Capital Projects Funds Total Nonmajor Governmental Funds 113

CITY OF SOLANA BEACH, CALIFORNIA

BUDGETARY COMPARISON SCHEDULE

GAS TAX FUND
FOR THE YEAR ENDED JUNE 30, 2021
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 197,834 $ 197,834 $ 197,834 $ - Resources (Inflows):

Taxes 336,400 336,400 310,442 (25,958)
Intergovernmental - - 10,000 10,000
Use of money and property 2,000 2,000 7,122 5,122
Amounts Available for Appropriations 536,234 536,234 525,398 (10,836) Charges to Appropriations (Outflows):

Public works 2,600 47,600 2,924 44,676
Capital outlay 292,300 96,533 247,300 150,767
Total Charges to Appropriations 294,900 294,900 99,457 195,443 Budgetary Fund Balance, June 30 $ 241,334 $ 241,334 $ 425,941 $ 184,607 114

CITY OF SOLANA BEACH, CALIFORNIA

BUDGETARY COMPARISON SCHEDULE

MUNICIPAL IMPROVEMENT DISTRICTS FUND
FOR THE YEAR ENDED JUNE 30, 2021
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 1, 1,153,761 $ 1,153,761 153,761 $ $ - Resources (Inflows):

Taxes 662,900 662,900 710,306 47,406
Intergovernmental 2,500 2,500 2,749 249
Use of money and property 800 800 4,818 4,018
Amounts Available for Appropriations 1,819,961 1,819,961 1,871,634 51,673 Charges to Appropriations (Outflows):

Public works 631,098 630,100 605,495 25,603
Total Charges to Appropriations 630,100 631,098 605,495 25,603 Budgetary Fund Balance, June 30 $ 1,189,861 $ 1,188,863 $ 1,266,139 $ 77,276 115

CITY OF SOLANA BEACH, CALIFORNIA

BUDGETARY COMPARISON SCHEDULE

LIGHTING DISTRICT FUND
FOR THE YEAR ENDED JUNE 30, 2021
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 2,801,163 2,801,163 $ 2,801,163 $ $ - Resources (Inflows):

Taxes 598,100 598,100 646,733 48,633
Intergovernmental 3,200 3,200 3,231 31
Use of money and property 30,000 30,000 21,468 (8,532)
Amounts Available for Appropriations 3,432,463 3,432,463 3,472,595 40,132 Charges to Appropriations (Outflows):

Public works 370,879 339,000 325,839 45,040
Transfers out 70,400 70,400 70,400 -
Total Charges to Appropriations 409,400 441,279 396,239 45,040 Budgetary Fund Balance, June 30 $ 3,023,063 $ 2,991,184 $ 3,076,356 $ 85,172 116

CITY OF SOLANA BEACH, CALIFORNIA

BUDGETARY COMPARISON SCHEDULE

COPS FUND
FOR THE YEAR ENDED JUNE 30, 2021
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 250,943 $ 250,943 250,943 $ $ - Resources (Inflows):

Intergovernmental 100,000 232,674 100,000 132,674
Use of money and property 400 400 3,179 2,779
Amounts Available for Appropriations 351,343 351,343 486,796 135,453 Charges to Appropriations (Outflows):

Public safety 150,000 148,877 150,000 1,123
Total Charges to Appropriations 150,000 150,000 148,877 1,123 Budgetary Fund Balance, June 30 $ 201,343 $ 201,343 $ 337,919 $ 136,576 117

CITY OF SOLANA BEACH, CALIFORNIA

BUDGETARY COMPARISON SCHEDULE

PUBLIC SAFETY FUND
FOR THE YEAR ENDED JUNE 30, 2021
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 278,751 278,751 $ 278,751 $ $ - Resources (Inflows):

Intergovernmental 61,824 49,500 454,707 392,883
Miscellaneous - - 884 884
Amounts Available for Appropriations 328,251 340,575 734,342 393,767 Charges to Appropriations (Outflows):

Public safety 97,324 85,000 313,595 (216,271)
Capital outlay - - 24,677 (24,677)
Total Charges to Appropriations 85,000 97,324 338,272 (240,948) Budgetary Fund Balance, June 30 $ 243,251 $ 243,251 $ 396,070 $ 152,819 118

CITY OF SOLANA BEACH, CALIFORNIA

BUDGETARY COMPARISON SCHEDULE

FIRE MITIGATION FUND
FOR THE YEAR ENDED JUNE 30, 2021
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ ( (7,438) $ (7,438) 7,438) $ $ - Resources (Inflows):

Charges for services 5,000 5,000 27,078 22,078
Amounts Available for Appropriations (2,438) (2,438) 19,640 22,078 Charges to Appropriations (Outflows):

Public safety 5,000 5,000 5,606 (606)
Total Charges to Appropriations 5,000 5,000 5,606 (606) Budgetary Fund Balance, June 30 $ (7,438) $ (7,438) $ 14,034 $ 21,472 119

CITY OF SOLANA BEACH, CALIFORNIA

BUDGETARY COMPARISON SCHEDULE

TRANSPORTATION DEVELOPMENT ACT FUND
FOR THE YEAR ENDED JUNE 30, 2021
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ ( (34,696) $ ( 34,696) $ 34,696) $ - Resources (Inflows):

Intergovernmental - - 167,872 167,872
Amounts Available for Appropriations (34,696) (34,696) 133,176 167,872 Charges to Appropriations (Outflows):

Capital outlay - 310,429 236,665 73,764
Total Charges to Appropriations - 310,429 236,665 73,764 Budgetary Fund (Deficit), June 30 $ (34,696) $ (345,125) $ (103,489) $ 241,636 120

CITY OF SOLANA BEACH, CALIFORNIA

BUDGETARY COMPARISON SCHEDULE

CDBG FUND
FOR THE YEAR ENDED JUNE 30, 2021
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ ( (15,917) $ ( 15,917) $ 15,917) $ - Resources (Inflows):

Intergovernmental 49,500 - - (49,500)
Amounts Available for Appropriations (15,917) 33,583 (15,917) (49,500) Charges to Appropriations (Outflows):

Public safety - - 743 (743)
Capital outlay 49,500 - - 49,500
Total Charges to Appropriations - 49,500 743 48,757
Budgetary Fund Balance, June 30 $ (15,917) $ (15,917) $ (16,660) $ (743) 121

CITY OF SOLANA BEACH, CALIFORNIA

BUDGETARY COMPARISON SCHEDULE

COASTAL AREA BUSINESS / VISITOR ASSISTANCE AND ENHANCEMENT FUND FOR THE YEAR ENDED JUNE 30, 2021
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 790,002 $ 790,002 790,002 $ $ - Resources (Inflows):

Taxes 100,500 112,089 100,500 11,589
Use of money and property 2,500 2,500 5,165 2,665
Amounts Available for Appropriations 893,002 893,002 907,256 14,254 Charges to Appropriations (Outflows):

Community development 68,950 53,100 25,821 43,129
Total Charges to Appropriations 53,100 68,950 25,821 43,129 Budgetary Fund Balance, June 30 $ 839,902 $ 824,052 $ 881,435 $ 57,383 122

CITY OF SOLANA BEACH, CALIFORNIA

BUDGETARY COMPARISON SCHEDULE

BOATING AND WATERWAYS FUND
FOR THE YEAR ENDED JUNE 30, 2021
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 62,229 62,229 $ 62,229 $ $ - Resources (Inflows):

Intergovernmental 450,000 - 91,545 (358,455)
Use of money and property - - (1,387) (1,387)
Amounts Available for Appropriations 62,229 512,229 152,387 (359,842) Charges to Appropriations (Outflows):

Public safety 450,000 - 450,000 -
Total Charges to Appropriations - 450,000 450,000 -
Budgetary Fund Balance, June 30 $ 62,229 $ 62,229 $ (297,613) $ (359,842) 123

CITY OF SOLANA BEACH, CALIFORNIA

BUDGETARY COMPARISON SCHEDULE

MISCELLANEOUS GRANTS FUND
FOR THE YEAR ENDED JUNE 30, 2021
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 6,240 6,240 $ 6,240 $ $ - Resources (Inflows):

Intergovernmental - - 421,168 421,168
Use of money and property - - (142) (142)
Amounts Available for Appropriations 6,240 6,240 427,266 421,026 Charges to Appropriations (Outflows):

Public safety - - 210,639 (210,639)
Public works 165,000 - 27,742 137,258
Total Charges to Appropriations - 165,000 238,381 (73,381) Budgetary Fund Balance, June 30 $ 6,240 $ (158,760) $ 188,885 $ 347,645 124

CITY OF SOLANA BEACH, CALIFORNIA

BUDGETARY COMPARISON SCHEDULE

DEVELOPER PASS-THRU FUND
FOR THE YEAR ENDED JUNE 30, 2021
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ (87) (87) $ (87) $ $ - Resources (Inflows):

Charges for services 100,000 74,423 100,000 (25,577)
Use of money and property - - (12,149) (12,149)
Amounts Available for Appropriations 99,913 99,913 62,187 (37,726) Charges to Appropriations (Outflows):

Community development 100,000 62,274 179,902 117,628
Public works 18,512 - - 18,512
Total Charges to Appropriations 100,000 198,414 62,274 136,140 Budgetary Fund Balance, June 30 $ (87) $ (98,501) $ (87) $ 98,414 125

CITY OF SOLANA BEACH, CALIFORNIA

BUDGETARY COMPARISON SCHEDULE

HOUSING FUND
FOR THE YEAR ENDED JUNE 30, 2021
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 637,265 637,265 $ $ 637,265 $ - Resources (Inflows):

Use of money and property 2,500 2,500 10,848 8,348
Amounts Available for Appropriations 639,765 639,765 648,113 8,348 Charges to Appropriations (Outflows):

Community development 58,559 10,000 949 57,610
Total Charges to Appropriations 10,000 58,559 949 57,610 Budgetary Fund Balance, June 30 $ 629,765 $ 581,206 $ 647,164 $ 65,958 126

CITY OF SOLANA BEACH, CALIFORNIA

BUDGETARY COMPARISON SCHEDULE

CAMP PROGRAMS FUND
FOR THE YEAR ENDED JUNE 30, 2021
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 13,501 13,501 $ 13,501 $ $ - Resources (Inflows):

Charges for services 388,900 271,463 388,900 (117,437)
Amounts Available for Appropriations 402,401 402,401 284,964 (117,437) Charges to Appropriations (Outflows):

Public safety 322,800 204,096 323,000 118,904
Parks and recreation 65,900 66,100 49,211 16,689
Total Charges to Appropriations 388,900 388,900 253,307 135,593 Budgetary Fund Balance, June 30 $ 13,501 $ 13,501 $ 31,657 $ 18,156 127

CITY OF SOLANA BEACH, CALIFORNIA

BUDGETARY COMPARISON SCHEDULE
SB1 STREETS & ROADS
FOR THE YEAR ENDED JUNE 30, 2021
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 185,200 185,200 $ $ 185,200 $ - Resources (Inflows):

Taxes 236,400 236,400 256,536 20,136
Use of money and property - - (2,989) (2,989)
Amounts Available for Appropriations 421,600 421,600 438,747 17,147 Charges to Appropriation (Outflow):

Capital outlay 208,300 208,300 208,323 (23)
Total Charges to Appropriations 208,300 208,300 208,323 (23) Budgetary Fund Balance, June 30 $ 213,300 $ 213,300 $ 230,424 $ 17,124 128

CITY OF SOLANA BEACH, CALIFORNIA

BUDGETARY COMPARISON SCHEDULE

CITY CIP CAPITAL PROJECTS FUND
FOR THE YEAR ENDED JUNE 30, 2021
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 2, 2,752,887 $ 2,752,887 752,887 $ $ - Resources (Inflows):

Charges for services 50,000 50,000 70,716 20,716
Use of money and property 37,000 37,000 66,026 29,026
Miscellaneous 10,000 10,000 93,683 83,683
Transfers in 70,000 70,000 - (70,000)
Amounts Available for Appropriations 2,919,887 2,919,887 2,983,312 63,425 Charges to Appropriations (Outflows):

Public works 63,400 63,400 5,265 58,135
Capital outlay 986,722 870,000 609,562 377,160
Total Charges to Appropriations 933,400 1,050,122 614,827 435,295 Budgetary Fund Balance, June 30 $ 1,986,487 $ 1,869,765 $ 2,368,485 $ 498,720 129

CITY OF SOLANA BEACH, CALIFORNIA

BUDGETARY COMPARISON SCHEDULE

SAND REPLENISHMENT / RETENTION AND COASTAL ACCESS CAPITAL PROJECTS FUND FOR THE YEAR ENDED JUNE 30, 2021
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 880,093 880,093 $ 880,093 $ $ - Resources (Inflows):

Taxes 200,900 200,900 224,178 23,278
Use of money and property 400 400 6,712 6,312
Amounts Available for Appropriations 1,081,393 1,081,393 1,110,983 29,590 Charges to Appropriations (Outflows):

Public safety 241,003 150,300 123,920 117,083
Capital outlay 150,000 150,000 - 150,000
Total Charges to Appropriations 300,300 391,003 123,920 267,083 Budgetary Fund Balance, June 30 $ 781,093 $ 690,390 $ 987,063 $ 296,673 130

CITY OF SOLANA BEACH, CALIFORNIA

BUDGETARY COMPARISON SCHEDULE

CITY DEBT SERVICE FUND
FOR THE YEAR ENDED JUNE 30, 2021
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 21,955 21,955 $ 21,955 $ $ - Resources (Inflows):

Transfers in 353,500 353,500 353,500 -
Amounts Available for Appropriations 375,455 375,455 375,455 - Charges to Appropriations (Outflows):

Debt service:

Principal retirement 267,300 267,300 319,071 (51,771)
Interest and fiscal charges 86,200 86,200 30,630 55,570 Total Charges to Appropriations 353,500 353,500 349,701 3,799 Budgetary Fund Balance, June 30 $ 21,955 $ 21,955 $ 25,754 $ 3,799 131

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132

FIDUCIARY FUNDS
Undergrounding District Funds - the Barbara/Granados Avenue, Pacific Avenue/East and West Circle Drive, and Marsalan Avenue Utility Underground Assessment Districts are utility districts created to finance the undergrounding of utility lines. These funds account for payments from property owners as well debt service on bonds that were issued to pay for the undergrounding improvements within the assessment districts. This is accounted for as a custodial fund because the City has no responsibility for the debt service on the bonds.

South Solana Sewer District Fund - this fund was formed to finance the construction of sewer improvements to connect the 51 properties of the assessment district to the City's sewer system. This fund accounts for payments from property owners as well as debt service on the bonds that were issued to pay for the sewer improvements. This is accounted as an custodial fund because the City has no responsibility for the debt service on the bonds. 133

CITY OF SOLANA BEACH, CALIFORNIA

COMBINING STATEMENT OF FIDUCIARY NET POSITION

CUSTODIAL FUNDS
JUNE 30, 2021
(with comparative totals for the year ended June 30, 2020) ASSETS
Cash and cash equivalents $ 35,573 194,317 $ 229,890 $ $ 112,380 Investments:

Money market mutual funds 1,450 196 1,646 17,287
Local Agency Investment Fund 59,324 - 59,324 178,690
Asset-backed securities 8,561 1,157 9,718 3,608
Federal agency securities 74,989 10,137 85,126 30,989
Medium term corporate notes 29,520 3,990 33,510 12,627
Supranational securities 1,189 161 1,350 618
US Treasury securities 58,740 7,940 66,680 23,552
Receivables:

Accrued interest 354 77 431 837
Due from other governments 789 773 1,562 1,623
Total Assets 60,004 429,233 489,237 382,211

LIABILITIES
Accounts payable 1,189 2,607 3,796 1,964
Accrued interest 6,678 62,021 68,699 71,376
Long-term liabilities:

Due in one year 60,000 15,000 75,000 85,000
Due in more than one year 1,420,000 360,000 1,780,000 1,855,000 Total Liabilities 382,867 1,544,628 1,927,495 2,013,340

NET POSITION
Restricted for:

Individuals, organizations, and other governments (322,863) (1,115,395) (1,438,258) (1,631,129) Total Net Position $ (1,115,395) $ (322,863) $ (1,438,258) $ (1,631,129) 2021 2020
Undergrounding
Districts
South Solana
Sewer District
134

CITY OF SOLANA BEACH, CALIFORNIA

COMBINING STATEMENT OF CHANGES IN FIDUCIARY NET POSITION

CUSTODIAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2021
(with comparative totals for the year ended June 30, 2020) Undergrounding
Districts
South Solana
Sewer District 2021 2020

ADDITIONS
Investment earnings:

Net increase (decrease) in fair value of investments $ (1,175) (2,661) $ (3,836) $ $ 5,046 Interest, dividends, and other 3,044 540 3,584 7,544
Total investment earnings (635) 383 (252) 12,590
Special assessment collections 38,507 176,822 215,329 97,439 Miscellaneous - 99,256 99,256 -
Total Additions 37,872 276,461 314,333 110,029

DEDUCTIONS
Contractual services 1,619 7,354 8,973 50,020
Interest expense 20,153 92,336 112,489 190,671
Total Deductions 21,772 99,690 121,462 240,691
Net Increase (Decrease) in Fiduciary Net Position 16,100 176,771 192,871 (130,662) Net Position - Beginning (338,963) (1,292,166) (1,631,129) - Restatement of Net Position - - - (1,500,467)
Net Position - Beginning, as Restated (338,963) (1,292,166) (1,631,129) (1,500,467) Net Position - Ending $ (1,115,395) $ (322,863) $ (1,438,258) $ (1,631,129) 135

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136

STATISTICAL SECTION
(UNAUDITED)
137

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138
Statistical Section
Contents
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.
* Net Position by Component
* Changes in Net Position
* Fund Balances of Governmental Funds
* Changes in Fund Balances of Governmental Funds
Revenue Capacity
These schedules contain information to help the reader assess the factors affecting the city's ability to generate its property taxes.
* Assessed Value and Estimated Actual Value of Taxable Property * Direct and Overlapping Property Tax Rates
* Principal Property Tax Payers
* Property Tax Levies and Collections
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. * Ratios of Outstanding Debt by Type
* Direct and Overlapping Debt
* Legal Debt Margin Information
* Pledged-Revenue Coverage
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 and to help make comparisons over time and with other governments.
* Demographic and Economic Statistics
* Principal Employers
Operating Information These schedules contain information about the city's operations and resources to help the reader understand how the city's financial information relates to the services the city provides and the activities it performs. * Full-time Equivalent City Government Employees by Function/Program * Operating Indicators by Function/Program
* Capital Assets Statistics by Function/Program
This part of the City of Solana Beach's Statistical 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.

Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year. The city implemented Statement 34 in 2003; schedules presenting government-wide information include information beginning in that year. 139

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140
Financial Trends
141
2012 2013 2014 2015 2016
Government activities
Net Investment in Capital Assets $ 34,301,049 $ 39,384,623 $ 34,095,894 $ 32,415,836 $ 30,365,711 Restricted 6,370,933 4,688,776 5,183,814 4,979,850 5,825,595 Unrestricted 5,275,012 1,418,151 6,871,872 (85,816) 1,230,929 Total governmental activities net
position $ 45,491,550 45,946,994 $ 46,151,580 $ 37,309,870 $ $ 37,422,235 Business-type activities
Net Investment in Capital Assets $ 5,470,469 $ 5,682,518 $ 6,324,862 $ 6,798,584 $ 5,594,350 Restricted - - - - -
Unrestricted 24,794,121 25,769,871 27,155,489 26,759,779 29,711,194 Total governmental activities net
position $ 31,452,389 30,264,590 $ 33,480,351 $ 33,558,363 $ $ 35,305,544 Primary government
Net Investment in Capital Assets $ 39,771,518 $ 45,067,141 $ 40,420,756 $ 39,214,420 $ 35,960,061 Restricted 6,370,933 4,688,776 5,183,814 4,979,850 5,825,595 Unrestricted 30,069,133 27,188,022 34,027,361 26,673,963 30,942,123 Total governmental activities net
position $ 76,943,939 76,211,584 $ 79,631,931 $ 70,868,233 $ 72,727,779 $

CITY OF SOLANA BEACH
Last Ten Fiscal Years
(Accrual Basis of Accounting)
ote: The City began to report accrual information when it implemented GASB Statement 34 in fiscal year 200 Fiscal Year
Net Position by Component
142
2017 2018 2019 2020 2021
$ 28,412,121 $ 27,241,251 $ 29,396,878 $ 26,666,266 $ 26,653,123 6,619,853 9,139,181 11,238,745 12,664,581 14,173,748
1,795,456 (2,320,375) (3,911,422) (1,487,812) (1,345,933) $ 36,827,430 $ 34,060,057 $ 36,724,201 $ 37,843,035 $ 39,480,938 $ 6,195,352 $ 5,929,088 $ 8,892,771 $ 12,052,987 $ 11,185,890 - 54 49 46 -
32,866,729 36,722,015 35,710,517 34,349,803 36,889,897
$ 39,062,081 $ 42,651,157 $ 44,603,337 $ 46,402,836 $ 48,075,787 $ 34,607,473 $ 33,170,339 $ 38,289,649 $ 38,719,253 $ 37,839,013 6,619,853 9,139,235 11,238,794 12,664,627 14,173,748
34,662,185 34,401,640 31,799,095 32,861,991 35,543,964
$ 75,889,511 $ 76,711,214 $ 81,327,538 $ 84,245,871 $ 87,556,725 Fiscal Year
143
2012 2013 2014 2015 2016
Expenses
Governmental Activities:

General government $ 3,521,929 3,509,970 $ 3,712,734 $ 3,344,429 $ 3,944,303 $ Public safety 8,177,235 7,801,875 8,416,330 8,441,144 9,162,345 Public works 5,070,916 4,499,601 5,008,665 5,181,223 5,438,407 Community development 957,995 957,303 1,361,588 1,281,059 1,378,130 Community services 604,445 561,563 579,088 622,608 627,748 Interest on long-term debt 139,345 78,156 439,918 388,144 398,408 Total Governmental Activities expenses 18,409,984 17,470,349 19,518,323 19,258,607 20,949,341 Business-Type Activities:

Sanitation 3,456,455 4,038,404 2,855,368 4,566,357 3,568,901 Solana Energy Alliance Fund - - - - -
Total Business-Type Activities Expenses 3,456,455 4,038,404 2,855,368 4,566,357 3,568,901 Total Primary Government Expenses $ 21,866,439 21,508,753 $ 22,373,691 $ 23,824,964 $ $ 24,518,242 Program Revenues
Governmental Activities:

Charges for services:

General government $ - 21,370 $ - $ - $ - $
Public safety 376,156 439,523 402,670 464,533 578,282
Public works 511,843 251,766 743,210 238,587 416,524
Community development 796,475 648,280 830,429 852,578 928,065 Community services 229,571 357,877 303,070 347,698 365,289 Operating Contributions:

Public safety 270,428 273,048 286,687 285,399 270,152
Public works 583,136 173,664 1,577,961 920,807 1,045,301 Community development - - - 109,689 200,388
Community services - 30,331 - - -
Capital Contributions and Grants:

Public safety 162,672 78,590 129,740 53,091 160,372
Public works - 25,000 - - -
Total Governmental Activities Program Revenues 2,910,392 2,319,338 4,273,767 3,272,382 3,964,373 Business-Type Activities:

Charges for services:

Sanitation $ 4,708,765 4,517,005 4,775,489 4,949,069 5,151,671 Solana Energy Alliance Fund - - - - -
Total Business-Type Activities Program Revenues 4,708,765 4,517,005 4,775,489 4,949,069 5,151,671 Total Primary Government Program Revenues $ 7,619,157 6,836,343 $ 9,049,256 $ 8,221,451 $ $ 9,116,044 Net (Expense)/Revenue
Governmental Activities $ (15,151,011) $ (15,499,592) $ (15,244,556) $ (15,986,225) $ (16,984,968) Business-Type Activities 1,252,310 478,601 1,920,121 382,712 1,582,770 Total primary Government Net Expense $ (14,247,282) (14,672,410) $ (13,324,435) $ (15,603,513) $ $ (15,402,198) General Revenues and Other Charges in Net Position
Governmental Activities:

Taxes:

Property taxes, levied for general purpose $ 6,597,393 $ 6,655,138 $ 6,880,916 $ 7,247,202 $ 7,705,956 Transient occupancy taxes 1,118,592 1,186,197 1,220,075 1,467,373 1,605,685 Sales taxes 3,077,691 2,963,507 2,814,702 2,808,203 3,255,104 Intergovernmental, unrestricted: 52,084 - - - -
Franchise taxes 698,672 685,336 714,991 765,995 736,042 Other taxes 2,643,515 2,670,333 2,736,146 2,747,073 2,797,559 Use of money and property 102,469 84,903 137,906 136,763 261,446 Other 722,094 494,008 1,399,850 914,672 735,521
Extraordinary Gain/(Loss) on dissolution on
redevelopment agency - 2,933,995 - - -
Total Governmental Activities 15,068,210 17,617,717 15,904,586 16,087,281 17,097,313 Business-Type Activities:

Use of money and property 152,477 78,615 71,541 71,973 115,321 Other 46,470 269,358 36,300 28,939 49,090
Total Business-Type Activities 125,085 421,835 107,841 100,912 164,411 Total Primary Government $ 15,193,295 18,039,552 $ 16,012,427 $ 16,188,193 $ $ 17,261,724 Changes in Net Position
Governmental Activities $ 2,466,706 $ (431,382) $ 660,030 $ 101,056 $ 112,345 Business-Type Activities 1,377,395 900,436 2,027,962 483,624 1,747,181 Total Primary Government $ 946,013 3,367,142 $ 2,687,992 $ 584,680 $ 1,859,526 $ (Accrual Basis of Accounting)
Last Ten Fiscal Years
Changes in Net Position

CITY OF SOLANA BEACH
Fiscal Year
144
2017 2018 2019 2020 2021
$ 4,101,170 4,309,372 $ 3,650,982 $ 4,985,418 $ 5,537,474 $ 10,539,671 9,628,140 11,050,684 12,616,348 13,116,915
5,944,432 5,487,183 5,937,131 4,894,915 4,665,830
1,754,910 1,745,101 1,482,428 1,585,952 1,506,502
730,645 1,122,128 1,178,128 1,226,910 1,193,256
381,634 389,077 368,495 363,326 356,001
23,452,462 22,681,001 23,667,848 25,672,869 26,375,978
2,100,256 1,602,359 4,204,504 4,221,307 3,891,241
390,533 - 5,210,816 4,350,085 3,841,312
2,490,789 1,602,359 9,415,320 8,571,392 7,732,553
$ 25,943,251 24,283,360 $ 33,083,168 $ 34,244,261 $ $ 34,108,531 $ - - $ 194,122 $ 205 $ 91,875 $
577,351 620,990 581,313 401,633 325,042
698,999 449,962 1,005,828 358,450 493,597
1,300,411 1,252,126 1,169,232 1,190,562 1,082,510
336,079 400,353 335,828 22,844 276,648
177,936 198,615 186,145 199,300 466,509
1,106,636 1,241,379 1,404,721 889,429 1,214,732
100,000 - - - -
139,416 129,324 148,747 80,000 232,674
420,005 158,370 298,205 345,162 301,580
- - - - -
4,856,833 4,451,119 5,324,141 3,487,585 4,485,167
5,415,690 5,255,483 5,592,045 5,588,249 5,676,286
494,307 - 5,202,375 4,178,287 3,567,034
5,909,997 5,255,483 10,794,420 9,766,536 9,243,320
$ 9,706,602 $ 10,766,830 $ 16,118,561 $ 13,254,121 $ 13,728,487 $ (18,595,629) (18,229,882) $ (18,343,707) $ (22,185,284) $ (21,890,811) $ 3,419,208 3,653,124 1,379,100 1,195,144 1,510,767
$ (15,176,421) (14,576,758) $ (16,964,607) $ (20,990,140) $ $ (20,380,044) $ 8,586,838 8,095,383 $ 9,070,200 $ 9,465,402 $ 10,093,847 $ 1,827,753 1,740,208 2,019,005 1,456,897 1,457,156
3,191,410 3,127,803 3,502,561 3,291,805 3,689,566
- - - - -
723,164 733,354 792,575 751,324 789,365
3,170,331 2,868,629 3,547,175 3,619,856 3,745,720
286,867 283,828 1,100,795 1,132,930 631,813
722,186 785,872 975,510 3,585,904 3,121,247
- - - - -
18,508,549 17,635,077 21,007,821 23,304,118 23,528,714
81,629 88,940 557,179 423,002 124,888
88,239 14,473 15,901 181,353 37,296
169,868 103,413 573,080 604,355 162,184
$ 18,678,417 17,738,490 $ 21,580,901 $ 23,908,473 $ $ 23,690,898 $ (87,080) (594,805) $ 2,664,114 $ 1,118,834 $ 1,637,903 $ 3,589,076 3,756,537 1,952,180 1,799,499 1,672,951
$ 3,501,996 3,161,732 $ 4,616,294 $ 2,918,333 $ 3,310,854 $ Fiscal Year
145
2012 2013 2014 2015 2016
General Fund
Nonspendable $ 6,482 $ 9,276 $ 7,523 $ 9,382 $ 7,471
Restricted - - - 508,897 -
Committed 264,534 278,377 324,083 454,048 787,790
Assigned 4,486,177 4,579,527 5,102,543 5,324,048 5,520,890 Unassigned 2,573,592 4,014,144 4,369,152 5,580,686 6,200,244 Total General Fund $ 8,881,324 7,330,785 $ 9,803,301 $ 11,368,164 $ $ 13,025,292 All Other Governmental Funds
Nonspendable $ - $ - $ - $ - $ -
Restricted 6,241,182 4,588,670 5,107,900 4,979,850 5,316,698 Assigned 539,450 525,735 425,416 589,120 849,917
Unassigned (315,857) (5,333,420) (222,713) (213,005) (184,544) Total all other Governmental Funds $ (219,015) 6,464,775 $ 5,310,603 $ 5,355,965 $ $ 5,982,071 Fiscal Year

CITY OF SOLANA BEACH
Fund Balances of Governmental Funds
Last Ten Fiscal Years
(Modified Accrual Basis Of Accounting)
146
2017 2018 2019 2020 2021
$ 72,579 20,164 $ 23,402 $ 52,665 $ 54,212 $
1,294,957 893,185 1,743,908 2,422,056 3,245,475
1,015,354 914,846 1,436,307 1,179,507 901,576
5,805,890 5,690,381 6,041,593 6,349,702 6,206,689
7,385,736 6,805,201 4,588,069 5,450,148 7,138,002
$ 15,574,516 14,323,777 $ 13,833,279 $ 15,454,078 $ $ 17,545,954 $ 200 - $ - $ - $ - $
7,844,224 5,726,668 9,494,837 10,242,525 10,928,273
- 1,385,099 - - -
(234,689) (336,475) (112,596) (58,138) (464,267)
$ 7,609,735 6,775,292 $ 9,382,241 $ 10,184,387 $ $ 10,464,006 Fiscal Year
147
2012 2013 2014 2015 2016
Revenues:

Taxes and assessments $ 12,881,767 $ 13,046,917 $ 13,135,199 $ 13,727,132 $ 14,719,229 Intergovernmental 1,822,705 2,230,532 3,217,319 2,674,057 3,069,673 Licenses and permits 420,339 361,573 429,464 461,687 471,581 Charges for services 799,836 830,907 959,935 1,001,943 1,313,658 Fines and forfeitures 342,136 323,961 348,337 392,683 502,921 Use of money and property 102,469 84,903 137,906 136,763 261,466 Other 604,953 1,099,809 1,941,493 961,755 735,521
Total revenues 16,974,205 17,978,602 20,169,653 19,356,020 21,074,049 Expenditures:

General government 3,230,362 3,057,761 3,085,499 3,222,933 3,500,443 Public safety 7,614,262 7,945,912 8,238,659 8,315,766 8,912,742 Public works 2,301,953 2,075,777 2,215,596 2,322,090 2,463,442 Community development 953,383 955,907 1,360,192 1,291,073 1,380,934 Community services 244,955 284,884 259,809 275,790 278,481 Capital outlay 2,048,301 7,638,942 3,452,914 1,773,690 2,190,316 Debt service:

Principal retirement 239,900 280,700 155,925 155,930 161,086 Interest 155,519 77,283 439,464 388,523 383,130
Payment to refunded bond escrow agent - 1,545,000 - - - Pass-through payments 7,147 - - - -
Total expenses 18,340,782 22,317,166 19,208,058 17,745,795 19,270,574 Excess (Deficiency) of Revenues
Over (Under) Expenditures (1,366,577) (4,338,564) 961,595 1,610,225 1,803,475 Other financing sources (uses):

Transfers in 2,560,970 742,322 1,319,473 446,865 743,400 Transfers out (2,560,970) (742,322) (1,319,473) (446,865) (743,400) Contributions to Successor Agency (834,007) - (10,000) - - Refunding Bonds issued 1,388,300 - - - -
Other Debts Issued 818,696 - - - -
Bond Discount (10,650) - - - -
Contributions to OPEB Trust Fund - - - (135,000) -
Long-term debt issued (24,062) 5,500,000 - - 614,759
Capital leases - - - - -
Total other financing sources (uses) 2,172,284 (834,007) 5,490,000 - 479,759 Extraordinary Gain/(Loss) on dissolution
of Redevelopment Agency - (366,005) - - -
Net change in fund balances /
net position $ 439,702 $ (5,172,571) $ 6,451,595 $ 1,610,225 $ 2,283,234 Capital assets used in debt
service calculation* $ 2,055,611 $ 7,859,585 $ 3,527,607 $ 1,764,750 $ 2,194,361 Debt service as a percentage of
noncapital expenditures 2.4% 2.5% 3.8% 3.4% 3.2%
* The amount of capital outlay used to calculate the ratio of total debt service expenditures to noncapital expenditures is the same as the reconciling item for capital outlay in the reconciliation between the government-wide statement of activities and the statement of revenues, expenditures and changes in fund balance.

Fiscal Year

CITY OF SOLANA BEACH
Changes In Fund Balances Of Governmental Funds
Last Ten Fiscal Years
(Modified Accrual Basis Of Accounting)
148
2017 2018 2019 2020 2021
$ 15,945,223 15,109,053 $ 17,275,214 $ 16,842,473 $ 19,775,654 $ 3,498,266 3,185,272 3,665,899 3,284,923 1,916,664
508,549 527,146 486,891 345,168 532,496
1,584,561 1,699,140 2,230,614 1,268,823 1,449,714
479,933 495,885 502,249 359,703 244,331
286,867 283,828 1,100,795 1,132,930 631,813
1,061,983 785,872 975,510 3,585,904 3,121,247
23,365,382 22,086,196 26,237,172 26,819,924 27,671,919
3,820,029 3,777,819 4,191,376 4,705,339 5,032,268
9,831,070 9,070,746 10,243,546 11,573,438 12,538,907
2,628,777 2,509,194 2,975,518 3,401,680 3,125,907
1,574,333 1,721,715 1,523,428 1,544,402 1,446,878
328,755 760,475 830,315 797,410 680,982
2,417,383 1,473,835 5,763,230 1,692,966 1,800,676
296,366 288,487 303,971 316,505 319,071
383,487 392,219 374,519 365,239 355,735
- - - - -
- - - - -
21,280,200 19,994,490 26,205,903 24,396,979 25,300,424
2,085,182 2,091,706 31,269 2,422,945 2,371,495
997,300 1,576,800 2,636,370 799,915 353,500
(997,300) (1,576,800) (2,636,370) (799,915) (353,500)
- - - - -
- - - - -
- - - - -
- - - - -
- - - - -
- - - - -
- - - - -
- - - - -
$ 2,085,182 2,091,706 $ 31,269 $ 2,422,945 $ 2,371,495 $ $ 2,432,556 1,440,550 $ 5,754,228 $ 1,697,994 $ 1,723,018 $

3.7% 3.6% 3.3% 3.0% 2.9%
Fiscal Year
149

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150
Revenue Capacity
151
Less:

Fiscal Residential Commercial Other Tax-Exempt
Year Property Property Property Property
2012 2,990,970 352,417 158,210 -
2013 3,053,864 459,003 156,019 -
2014 3,150,064 457,092 154,207 -
2015 3,348,897 471,453 159,027 -
2016 3,549,149 490,565 161,797 -
2017 3,750,959 504,604 173,545 -
2018 3,974,035 567,922 182,779 -
2019 4,237,025 598,064 202,769 -
2020 4,479,369 619,869 254,522 -
2021 4,713,080 632,197 201,845 -
(a) The County of San Diego does not compile Estimated Actual Valuations N/A - Data not available
Source: San Diego County Assessor 2011/12 - 2020/21 Combined Tax Rolls HdL Coren & Cone.

City of Solana Beach Finance Department

CITY OF SOLANA BEACH
Assessed Value and Estimated Actual Value of Taxable Property Last Ten Fiscal Years
(in thousands of dollars)
152
Taxable Assessed
Total Estimated Value as a
Total Taxable Direct Actual Percentage of
Assessed Tax Taxable Actual
Value Rate Valuea Taxable Value

0.1800% N/A N/A 3,501,597

0.1800% N/A N/A 3,668,886

0.1803% N/A N/A 3,761,363

0.1779% N/A N/A 3,979,377

0.1778% N/A N/A 4,201,511

0.1779% N/A N/A 4,429,108

0.1778% N/A N/A 4,724,736

0.1778% N/A N/A 5,037,858

0.1779% N/A N/A 5,353,760

0.1780% N/A N/A 5,547,122
153
General
Basic Municipal Total City's
Fiscal Tax Improvement Lighting Share of 1%
Year Levy District District Levy per Prop 13
2012 0.1602 0.0037 0.00955 0.1735
2013 0.1602 0.0037 0.00955 0.1735
2014 0.1602 0.0037 0.00955 0.1735
2015 0.1602 0.0037 0.09600 0.1735
2016 0.1602 0.0037 0.09600 0.1735
2017 0.1602 0.0037 0.09600 0.1735
2018 0.1602 0.0037 0.00955 0.1735
2019 0.1602 0.0037 0.00955 0.1735
2020 0.1602 0.0037 0.00955 0.1735
2021 0.1602 0.0037 0.00955 0.1735
Carlsbad/
Oceanside/ Santa Fe
Fiscal San Diego Vista School Community Irrigation
Year County (1) Projects Districts College District (2) 2012 0.167550 0.0004 0.40281 0.10486 0.025350
2013 0.167550 0.0004 0.40281 0.10486 0.025350
2014 0.167550 0.0004 0.40281 0.10486 0.025350
2015 0.167550 0.0004 0.40281 0.10486 0.025340
2016 0.167550 0.0004 0.40281 0.10486 0.025340
2017 0.167550 0.0004 0.40281 0.10486 0.025340
2018 0.167490 0.0004 0.40285 0.10490 0.025330
2019 0.167490 0.0004 0.40293 0.10490 0.025330
2020 0.167490 0.0004 0.40293 0.10490 0.025330
2021 0.167490 0.0004 0.40290 0.10490 0.025330
(1)
(2) Includes Cwa Santa Fe Irrigation District (.00423) and Santa Fe Irrigation (.02111) (3)
Source: San Diego County Assessor 2020/21 Annual Tax Increment Tables and HdL Coren and Cone.

CITY OF SOLANA BEACH
Includes County School Services, Library, Childrens Institution Tuition, and Regional Occupational Centers.

Includes only rate(s) from indebtedness adopted prior to 1989 per California State Statute
Direct and Overlapping Property Tax Rates,
Last Ten Fiscal Years
(rate per $100 of taxable value)
City's Share of 1% Levy Per Prop 13
Overlapping Rates
154
Solana Beach Metropolitan Santa Fe Mira Costa San Dieguito Total Educational School District Water Irrigation Comm Prop Aa Direct & Revenue Prop JJ District Tax Rate College 11/6/2013 Overlapping Augmentation Debt Service Debt Service Reduction 2016A 2013A A1 Tax Rate

0.12551 0.0037 - - - - 1.00370

0.12551 0.0035 - - - - 1.00350

0.12551 0.0035 - - - 0.0378 1.04131

0.12551 0.0035 - - - 0.0215 1.02497

0.12551 0.0035 - - - 0.0227 1.02622

0.12551 0.0035 - - - 0.0228 1.02625

0.12550 0.03093 0.0035 - 0.01443 0.0223 1.07115

0.12550 0.02886 0.0035 - 0.01294 0.0230 1.06828

0.12550 0.02800 0.0035 - 0.01299 0.0232 1.06767

0.12550 0.02688 0.0035 - 0.01373 0.0233 1.06738
Voter Approved (3)
Overlapping Rates
155

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156
Percentage
of Total City
Taxable Taxable
Assessed Assessed
Taxpayer Value Value
For the Fiscal Year Ended June 30, 2021
S B T C Holdings LLC $ 1.86% 103,427,450
Pacific Solana Beach Holdings LP 72,101,495 1.30%
SB Coporate Centre III-IV LLC 59,922,135 1.08%
GRE Beachwalk LLC (Pending Appeals on Parcels) 35,285,166 0.64% Sanyo Foods Corporation of America 34,035,001 0.61%
Fenton Solana Highlands LLC 33,139,762 0.60%
E R P Operating LP 20,749,877 0.37%
Lavida Delmar Asscs LP 17,709,620 0.32%
Solana Mar LLC 0.31% 17,200,349
Showprop Monrovia II LLC 0.30% 16,777,695
Total $ 7.40% 410,348,550
For the Fiscal Year Ended June 30, 2012
SB Corporate Centre III-IV LLC $ 1.07% 37,324,946
Solana Beach Towne Centres Investments
(Pending Appeals on Parcels) 0.91% 31,930,384
Sanyo Foods Corporation of America 0.84% 29,241,915
Pacific Solana Beach Holdings LP 29,235,554 0.83%
Fenton Solana Highlands LLC 27,669,189 0.79%
Muller-Beachwalk LLC 22,400,000 0.64%
E R P Operating LP 17,708,254 0.51%
Lavida Delmar Asscs LP 15,649,998 0.45%
445 Marine View LLC 15,000,000 0.43%
Urschel Laboratories Inc 12,853,076 0.37%
Total $ 239,013,316 6.83%
Source: HdL Coren & Cone and San Diego
County Assessor 2011/12 & 2020/21

CITY OF SOLANA BEACH
Principal Property Tax Payers,
Current Year and Nine Years Ago
157
Fiscal
Year Taxes Levied
Ended for the Percentage
June 30, Fiscal Year Amount of Levy
2012 $ 5,489,946 5,770,042 $ 95.1%
2013 5,832,325 6,110,404 95.4%
2014 6,033,082 6,303,038 95.7%
2015 6,257,093 6,576,197 95.1%
2016 6,635,180 6,931,466 95.7%
2017 7,017,400 7,300,293 96.1%
2018 7,444,166 7,741,663 96.2%
2019 7,949,648 8,232,844 96.6%
2020 8,306,418 8,622,755 96.3%
2021 8,652,200 9,074,415 95.3%
Sources:

CITY OF SOLANA BEACH
Property Tax Levies and Collections,
Last Ten Fiscal Years
City of Solana Beach Finance Department, County of San
Diego Office of Auditor-Controller.

Collected within the
Fiscal Year of the Levy
158
Collections
in Subsequent Percentage
Years Amount of Levy
$ 5,489,946 - $ 95%
6,090,470 258,145 100%
6,286,055 252,973 100%
6,472,515 215,422 98%
6,715,343 80,163 97%
7,044,541 27,141 96%
7,477,788 33,622 97%
7,977,388 27,740 97%
8,342,819 36,401 97%
8,717,424 65,224 96%
Total Collections to Date
159

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160
Debt Capacity
161

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162
Business-type
Activities
2002 ABAG Refunding Total Percentage
Fiscal Lease Revenue Lease Bonds Capital Primary of Personal Per Year Bonds ABAG Leases Loans Government Income a Capita a 2012* $ 1,388,300 - $ $ 958,681 - $ $ 14,132,771 $ 16,479,752 4.20% 0.0032 2013* 1,279,300 - 787,950 - 13,095,631 15,162,881 4.58% 0.0035 2014* 1,166,600 - 5,500,000 745,693 12,175,456 19,587,749 3.56% 0.0027 2015* 1,055,400 - 5,500,000 701,931 11,273,883 18,531,214 3.95% 0.0030 2016 940,600 - 5,500,000 1,271,372 10,339,405 18,051,377 4.05% 0.0031 2017 817,200 5,500,000 1,113,062 9,373,587 16,803,849 4.85% 0.0036 2018 - 690,400 5,500,000 943,496 19,146,912 26,280,808 3.10% 0.0023 2019 - 560,600 5,500,000 769,326 18,064,945 24,894,871 3.52% 0.0025 2020 - 423,000 5,500,000 590,421 17,449,133 23,962,554 3.66% 0.0026 2021 287,700 - 5,500,000 406,650 16,818,321 23,012,671 3.88% 0.0028 Notes:
a
See Demographic and Economic Statistics schedule for personal income and population data.

These ratios are calculated using personal income and population for the prior calendar year. * Prior years adjusted to comply with GASB comment Q&A 9.24- Included the Premiums/Discounts and Bonds ** Prior year ajdusted to comply with GFOA comment GASB-S44 23- included bonds to schedule

CITY OF SOLANA BEACH
Ratios of Outstanding Debt by Type,
Last Ten Fiscal Years
(dollars in thousands, except per capita)
Government Activities
Details regarding the city's outstanding debt can be found in the notes to the financial statements. 163
Fiscal Year 2020-21 Assessed Valuation :

Percent Net
Gross Bonded Applicable Bonded
Direct Debt: Debt Balance to City (1) Debt
$ 100.000% (3) 287,700 $ 287,700
City of Solana Beach Capital Lease Obligation 406,650 100.000% 406,650 Total Direct Debt 694,350
Overlapping Debt:

0.170% 45,611 26,830,000
306,265,000 4.628% 14,173,944
431,325,000 7.632% 32,918,724
27,780,000 1.303% 361,973
93,095,000 31.929% 29,724,303
2,220,000 100.000% 2,220,000
6,315,000 0.557% 35,175
211,585,000 0.947% 2,003,710
400,125,000 0.947% 3,789,184
8,585,000 0.947% 81,300
12,730,000 7.632% 971,554
2,289,900 100.000% 2,289,900
Total Overlapping Debt 88,615,378
Total Direct and Overlapping Debt (2) 89,309,728 $
Debt to Assessed Valuation Ratios :

Direct Debt
Overlapping Debt
Total Debt
Note:
(3) Includes the Unamortized Bond Discount
Source: California Municipal Statistics, Inc.

1.60%

1.61%
San Dieguito Union High School District
Certificates of Participation
Olivenhain Municpal Water District,
Assessment District No. 96-1
San Diego County General Fund Obligations
$5,547,944,868
Metropolitan Water District
San Dieguito Union High School District
Community Facilites District No. 95-1
Solana Beach School District School Facilities
Improvement District No. 2016-1
San Diego County Superintedent of Schools
General Fund Obligations
San Diego County Pension Obligations
Mira Costa Community College District
(1) - Percentage of overlapping agency's assess valuation located within the boundaries of the city. (2) - Excludes tax and revenue anticipation notes, enterprise revenues, mortgage revenue and tax allocation bonds and non-bonded capital lease obligations.

0.01%

CITY OF SOLANA BEACH
Direct and Overlapping Governmental Activities Debt
As of June 30, 2021
City of Solana Beach Lease Agreement
San Dieguito Union High School District
City of Solana Beach 1915 Act Bonds
Overlapping Tax Increment Debt
164
Legal Debt Margin Calculation for Fiscal Year 2021
Assessed value $ 5,547,945
Debt limit (15% of assessed value) 832,192
Legal debt margin $ 832,192
Legal Debt
Total net debt Margin
Applicable to Legal Percentage of
Fiscal Year Debt Limit Limit Debt Margin Debt Limit
2012 $ 513,291 $ - $ 513,291 100.00%
2013 550,417 - 550,417 100.00%
2014 564,290 - 564,290 100.00%
2015 597,013 - 597,013 100.00%
2016 630,359 - 630,359 100.00%
2017 664,464 - 664,464 100.00%
2018 708,810 - 708,810 100.00%
2019 755,767 - 755,767 100.00%
2020 793,275 - 793,275 100.00%
2021 832,192 - 832,192 100.00%

CITY OF SOLANA BEACH
Legal Debt Margin Information
Last Ten Fiscal Years
(dollars in thousands)
165
Use of Net
Fiscal Money & Lease/ Less: Available
Year Property Rents Expenditures Revenue
2012* 4,122 154,349 - 158,471
2013* 154,280 - - 154,280
2014* 148,974 - - 148,974
2015* 148,732 - - 148,732
2016* 153,283 - - 153,283
2017* 152,429 - - 152,429
2018* 151,067 - - 151,067
2019* 154,321 - - 154,321
2020* 147,382 - - 147,382
2021* 150,056 - - 150,056
Fiscal
Year Principal Interest Coverage
2012* 109,000 45,349 1.03
2013* 112,700 41,580 1.00
2014* 111,200 37,774 1.00
2015* 114,800 33,932 1.00
2016* 123,400 29,883 1.00
2017* 126,800 25,629 1.00
2018* 129,800 21,267 1.00
2019* 137,600 16,721 1.00
2020* 135,300 12,082 1.00
2021* 142,700 7,356 1.00
Notes:
* 2002 ABAG Lease Revenue Bonds
2011 ABAG Refunded Lease Revenue Bonds
Details regarding the city's outstanding debt can be found in the notes to the financial statements.

Expenditures do not include interest, depreciation, or amortization expenses.

CITY OF SOLANA BEACH
Pledged-Revenue Coverage
Last Ten Fiscal Years
Debt Service
166
Demographic and Economic
Information
167
Personal Per
Income Capita
Calendar (thousands Personal Unemployment
Year Population of dollars) Income Rate
2011 13,000 $ 691,899 $ 53,223 6.8%
2012 12,987 695,142 53,526 4.7%
2013 13,099 697,561 53,253 4.1%
2014 13,059 731,200 55,992 6.0%
2015 13,494 778,568 57,697 4.8%
2016 13,527 815,210 60,265 4.3%
2017 13,938 830,408 59,578 1.7%
2018 13,933 875,833 62,860 1.7%
2019 13,838 873,757 63,141 1.7%
2020 13,827 894,002 64,656 5.1%
Sources: HdL Coren & Cone report prepared on 7/28/2021

CITY OF SOLANA BEACH
Demographic and Economic Statistics
Last Ten Calendar Years
168
Employer Category Business category
Ceasar Entertainment 1 Restaurants
Employee's Association SDG-E 1 Associations
General Dynamics Nassco 1 Ship Builders & Repairers (Mfrs) Illumina Inc 1 Biotechnology Products & Services
Kaiser Permanente Zion Med Ctr 1 Health Services
Merchants Building Maintenance 1 Janitor Service
Page One Seo 1 Mental Health Services
Palomar Pomerodo Health Rehab 1 Rehabilitation Services Rady's Children's Hospital 1 Hospitals
San Diego County Sheriff 1 Police Departments
Scripps Mercy Hospital 1 Hospitals
Scripps Research Institute 1 Laboratories-Research & Development Sea World-San Diego 1 Amusement & Theme Parks
Sharp Grossmont Rehab Ctr 1 Rehabilitation Services
Sharp Mary Birch Hospital 1 Hospitals
Sharp Memorial Hospital 1 Hospitals
Sony Electronics 1 Electronic Equipment & Supplies-Retail Kaiser Permanente Vandever Med 2 Physicians & Surgeons
San Diego Community College 2 Junior-Community College- Tech Institutes UC San Diego Health 2 Hospitals
32nd St Naval Station 3 Federal Government-National Security Mccs Mcrd 3 Military Bases
UCSD- Neural Computation 3 University-College Dept/Facility/Office University of California 3 University-College Dept/Facility/Office Univesity-Calfornia Sn Diego 3 University-College Dept/Facility/Office Source:

State of California- Employee Development Department- Major Employers in San Diego for 2021 Categories
1 1,000-4,999 Employees
2 5,000-9,999 Employees
3 10,000+ Employees
Employer information specific to the City of Solana Beach is not readily available* * Due to unreliable data, the Top Employer Report is no longer offered by HdL Coren & Cone

CITY OF SOLANA BEACH
25 MAJOR EMPLOYERS - SAN DIEGO COUNTY
AS OF 2021
169

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170
Operating Information
171
Fiscal Years: 2012 2013 2014 2015 2016
Function/Program
General government
City Council 0.20 0.20 0.20 0.20 0.20
City Clerk 2.75 2.65 2.60 3.10 3.10
City Manager 1.92 1.84 1.74 2.05 2.05
Legal Services 0.25 0.25 0.25 0.25 0.25
Finance 3.40 3.35 3.80 3.55 3.55
Personnel 1.10 0.98 0.95 1.00 1.00
Info/Communication Systems 1.00 1.00 1.00 1.00 1.00
Community Development 5.50 5.50 5.40 6.00 6.00
Public Safety
Fire 19.22 19.95 19.95 19.95 19.95
Code Enforcement 1.78 1.75 1.75 1.80 1.80
Marine Safety 8.08 8.06 8.06 8.06 9.49
Junior Lifeguards 3.73 3.73 3.73 3.73 3.53
Public Works
Engineering 2.31 2.48 2.41 2.28 2.13
Environmental/Flood Control 1.10 1.10 1.10 1.10 1.10
Street Maintenance 2.90 2.90 2.90 2.95 2.95
Park Maintenance 1.35 1.35 1.35 1.35 1.35
Recreation & Community Services
Community Services 0.95 0.95 0.95 0.95 0.95
Recreation (1) 2.59 2.59 2.59 2.46 2.48
Sanitation 2.93 2.93 2.98 2.93 3.22
Improvement Districts 0.95 0.95 0.95 0.9 0.9
Redevelopment Agency 0.50 0.60 1.05 0.90 0.90
Solana Energy Alliance* - - - - -
Total Personnel 64.51 65.11 65.71 66.51 67.90
N/A - Data Not Available
*Solana Energy Alliance started mid FY18
(1) Includes Camp Recreation
Source: City of Solana Beach's Annual Budget

CITY OF SOLANA BEACH
Full-time-Equivalent City Government Employees by Function/Program Last Ten Fiscal Years
Notes: A full-time employee is scheduled to
work 2,080 hours per year (including
Full-time equivalent employment is
calculated by dividing total labor hours by
2,080.
172
2017 2018 2019 2020 2021

0.20 0.20 0.20 0.20 0.20

3.10 3.10 3.10 3.23 3.23

1.80 1.90 1.90 2.48 2.48

0.25 0.25 0.25 0.25 0.25

3.55 3.45 3.05 3.30 3.30

1.15 0.95 0.95 0.95 0.95

1.00 1.00 1.00 1.00 1.00

5.80 5.80 5.80 6.00 6.00

19.95 20.20 20.20 20.20 20.20

1.80 1.80 1.80 1.80 1.80

9.49 9.29 9.29 9.71 9.71

4.03 4.23 4.23 4.7 4.7

2.73 2.73 2.73 2.73 2.73

1.05 1.05 1.05 1.00 1.00

2.95 2.95 2.95 2.95 2.95

1.35 1.35 1.35 1.35 1.35

0.90 0.90 0.65 0.65 0.65

2.43 2.43 2.38 2.40 2.40

3.12 3.37 3.37 3.37 3.37

0.9 0.9 0.9 0.9 0.9

1.10 0.80 0.80 0.14 0.14
- 0.75 0.75 0.75 -

68.65 68.65 68.70 70.06 70.06
173
2012 2013 2014 2015 2016
Function/Program
Community development
Number of:

Business licenses (A) 1877 2023 2147 1957 2068
Plan checks (B) 211 225 276 275 304
Code violations (calendar basis) 1277 1458 1467 1016 1240 Police (Calendar basis)
Number of calls for service (C) (D):

Priority 1 1211271213
Priority 2 501 480 498 467 437
Priority 3 1689 1711 1624 1712 1740
Priority 4 1199 1156 1037 1225 1110
Priority 5 N/A N/A N/A N/A N/A
Priority 6 N/A N/A N/A N/A N/A
Priority 7 N/A N/A N/A N/A N/A
Priority 8 N/A N/A N/A N/A N/A
Priority 9 N/A N/A N/A N/A N/A
FBI Index Crimes 337 321 210 305 240
Fire
Emergency Responses 1093 1736 1702 1798 1810
Training Hours n/a 5090 7079.67 6178 5997
Plan Checks 161 335 92 289 380
Public works
Miles of:

Street resurfacing/repair 180000** 150000** 150000** 550000** 5.3* Street sweeping 900 900 900 900* 900*
Number of:

Street signal maintained 168 168 192 192 192
Trees pruned per year 158 500 158 40 40
Recreation & community services
Number of enrollees:

Day camp (Calendar basis) 315 385 280 329 266
Classes (classes offered to san digueto adult
school) 35 35 N/A 144 ***N/A
Mira Costa College Community Education,
# of students N/A N/A N/A N/A N/A
Special events (attendees) 11250 N/A 7350 10600 7800
N/A - Data not available
(A) - Includes new & renewal licenses, excludes temporary licenses (B) - Excludes temporary plan checks.
(C) - Numbers adjusted and updated on CAFR FY16-17 for FY08-FY17 numbers to count only complete calls for service. (D) - FY18-19 San Diego Sheriff dispatch system shifted to a 9-category system Sources: Various city departments.
* Street Repair in Miles
** Street repair in Square Feet (SF)
*** Classes offered by Mira Costa College

CITY OF SOLANA BEACH
Operating Indicators by Function/Program
Last Ten Fiscal Years
Fiscal Year
174
2017 2018 2019 2020 2021
2007 2055 2345 2677 2677
284 319 319 399 399
1124 2513 2656 N/A N/A
7 11929
343 470 209 159 207
1141 1825 167 117 143
826 1181 1154 1109 1337
N/A N/A 247 226 337
N/A N/A 147 287 212
N/A N/A 703 619 832
N/A N/A000
N/A N/A000
173 227 139 117 231
1883 1859 1792 1792 1495
4695.6 4687 6350 6350 6375
390 375 375 375 436

1.7* 1.9 3.8 1 0.8
900* 504 504 504 504
192 192 192 192 192
500 274 280 280 280
315 322 315 312 290
***N/A ***N/A ***N/A ***N/A ***N/A
N/A 720 700 400 150
8300 7400 7700 6500 2200
Fiscal Year
175
2012 2013 2014 2015 2016
Function/Program
Public Safety
Code enforcement vehicles 2 2222
Fire
Stations 1 1 1 1 1
Fire Engines 4 4433
Other vehicles 2 2122
Public works
Streets (miles) 46 46 46 42 42
Street lights (city-owned) 748 748 748 527 527
Traffic signals 13 16 18 16 16
Public works vehicles 7 7 8 11 11
Public works Corporation Yard 1 1111
Recreation & community service
Community centers 2 2 2 2 2
Parks 3 3333
Marine Safety
Lifeguard Stations (Permanent)* 3 3333
Lifeguard Stations (Temporary) N/A N/A N/A N/A N/A
Vehicles 5 5444
Notes: No capital asset indicators are available for the general government.

Sources: Various city departments.
* Both Fixed and Portable Towers up FY18. FY19 broke out number of temporary stations.

Fiscal Year

CITY OF SOLANA BEACH
Capital Asset Statistics by Function/Program
Last Ten Fiscal Years
176
2017 2018 2019 2020 2021
22222
11111
33222
22333
42 42 42 42 42
527 525 525 525 525
16 16 16 16 16
12 8 8 8 8
11111
22222
32222
66333
N/A N/A 3 4 4
55555
Fiscal Year
177

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178

CI TY OF

SOLANA BEACH
6 3 5 S. Hi g hwa y 101
So l a n a Be a c h , Ca 9 207 5
www. c it y o f s o l a n a b e a c h . o r g
( 8 5 8 ) 7 20- 2 4 60

Lance, Soll & Lunghard, LLP 203N.BreaBlvd.,Suite 203 Brea,CA92821 Phone: 714.672.0022 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 GOVERNMENT AUDITING STANDARDS
To the Honorable Mayor and Members of the City Council
City of Solana Beach, 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, each major fund, and the aggregate remaining fund information of the City of Solana Beach, California (the “City”), as of and for the year ended June 30, 2021, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements, and have issued our report thereon dated January 18, 2022.

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.

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.

Ls~ ....
•••• ••
~ PrimeGlobal ,1nAmx:im/,m(Jj
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To the Honorable Mayor and Members of the City Council
City of Solana Beach, California
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 City’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 City’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Brea, California
January 18, 2022
Ls~ ....
•••• ••

Lance, Soll & Lunghard, LLP 203N.BreaBlvd.,Suite 203 Brea,CA92821 Phone: 714.672.0022 January 18, 2022
To the Honorable Mayor and Members of the City Council
City of Solana Beach, California
We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Solana Beach, California (the “City”) for the year ended June 30, 2021. Professional standards require that we provide you with information about our responsibilities under generally accepted auditing standards, Government Auditing Standards and the Uniform Guidance, as well as certain information related to the planned scope and timing of our audit. We have communicated such information in our letter to you dated April 20,2021. Professional standards also require that we communicate to you the following information related to our audit.

Significant Audit Findings and Other Issues
Qualitative Aspects of Significant Accounting Practices Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the City are described in the notes to the financial statements. As described in Note 1 to the financial statements, the City changed accounting policies related to accounting for fiduciary activities by adopting Statement of Governmental Accounting Standards (GASB Statement) No. 84, Fiduciary Activities, in Fiscal Year 2020-21. Accordingly, the cumulative effect of the accounting change as of the beginning of the year is reported in the Statement of Changes in Fiduciary Net Position. We noted no transactions entered into by the City during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period.

Accounting estimates are an integral part of the financial statements prepared by management and are based on management’s knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimates affecting the City’s financial statements were:

Management’s estimates of its net pension liabilities, net other post-employment benefits (OPEB) liability, and claims liability are based on actuarial valuation specialist assumptions.

We evaluated the key factors and assumptions used to develop the net pension liabilities, net OPEB liability, and claims liability in determining that they are reasonable in relation to the financial statements taken as a whole.

Certain financial statement disclosures are particularly sensitive because of their significance to financial statement users.

The disclosure of Debt Covenant Compliance for JPA Loans in Note 11 to the financial statements calculates the City’s debt service coverage ratios, which are required disclosures related to the City’s debt covenants and are of particular importance to users of the financial statements, particularly the City’s debtholders.

The financial statement disclosures are neutral, consistent, and clear.

Ls~ ....
•••• ••
~ PrimeGlobal ,1nAmx:im/,m(Jj
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To the Honorable Mayor and Members of the City Council
City of Solana Beach, California
Significant Unusual Transactions
Management is responsible for the policies and practices used to account for significant unusual transactions. No significant unusual transactions have occurred during fiscal year 2020-2021.

Difficulties Encountered in Performing the Audit
We encountered no significant difficulties in dealing with management in performing and completing our audit.

Corrected and Uncorrected Misstatements
Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are trivial, and communicate them to the appropriate level of management.

Management has corrected all such misstatements. In addition, none of the misstatements detected as a result of audit procedures and corrected by management were material, either individually or in the aggregate, to the financial statements taken as a whole.

Disagreements with Management
For purposes of this letter, a disagreement with management is a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditor’s report. We are pleased to report that no such disagreements arose during the course of our audit.

Circumstances that Affect the Form and Content of the Auditor’s Report New auditing standards were implemented in fiscal year 2020-2021 related to Statement of Auditing Standards 134, Auditor Reporting and Amendments, Including Amendments Addressing Disclosures in the Audit of Financial Statements, through Statement of Auditing Standards 140, Supplementary Information in Relation to the Financial Statements as a Whole. These standards updated the form and content of the financial statement auditor’s report. The purpose of the change was to present an easier format for users to understand the results of the audit and management’s responsibilities.

Management Representations
We have requested certain representations from management that are included in the management representation letter dated January 18, 2022.

Management Consultations with Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a “second opinion” on certain situations. If a consultation involves application of an accounting principle to the City’s financial statements or a determination of the type of auditor’s opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants.

Other Audit Findings or Issues Discussed with Management We generally discuss a variety of matters, including the significant events or transactions that occurred during the year, business conditions affecting the City and business plans and strategies that may affect the risks of material misstatements, the application of accounting principles and auditing standards, with Ls~ ....
•••• ••
To the Honorable Mayor and Members of the City Council
City of Solana Beach, California
management each year prior to retention as the City’s auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention.

Other Matters
We applied certain limited procedures to management’s discussion and analysis; the budgetary comparison schedules for the General Fund and Transnet Fund; the schedules of proportionate shares of the net pension liabilities; the schedule of changes in net other post-employment benefits (OPEB) liability and related ratios; the schedules of employer’s contributions; and the schedule of investment returns which are required supplementary information (RSI) that supplements the basic financial statements. Our procedures consisted of inquiries of management regarding 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 did not audit the RSI and do not express an opinion or provide any assurance on the RSI.

We were engaged to report on combining and individual fund statements and schedules, which accompany the financial statements but are not RSI. With respect to this supplementary information, we made certain inquiries of management and evaluated the form, content, and methods of preparing the information to determine that the information complies with accounting principles generally accepted in the United States of America, the method of preparing it has not changed from the prior period, and the information is appropriate and complete in relation to our audit of the financial statements. We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves.

We were not engaged to report on introductory or statistical sections of the Annual Comprehensive Financial Report, which accompany the financial statements but are not RSI. Such information has not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on it.

The following new Governmental Accounting Standards Board (GASB) pronouncements were effective for fiscal year 2020-2021 audit:

GASB Statement No. 84, Fiduciary Activities.

GASB Statement No. 90, Majority Equity Interests - an Amendment of GASB Statement Nos. 14 and 61.

GASB Statement No. 98, the Annual Comprehensive Financial Report.

The following GASB pronouncements are effective in the following fiscal years’ audits and should be reviewed for proper implementation by management:

Fiscal year 2022
GASB Statement No. 87, Leases.

GASB Statement No. 89, Accounting for Interest Cost Incurred before the End of a Construction Period.

GASB Statement No. 97, Certain Component Unit Criteria, and Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans.

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To the Honorable Mayor and Members of the City Council
City of Solana Beach, California
Fiscal year 2023
GASB Statement No. 91, Conduit Debt Obligations.

GASB Statement No. 94, Public-Private and Public-Public Partnerships and Availability Payment Arrangement.

GASB Statement No. 96, Subscription-Based Information Technology Arrangements.

Restriction on Use
This information is intended solely for the use of City Council and management of the City and is not intended to be, and should not be, used by anyone other than these specified parties.

Very truly yours,
Brea, California
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COUNCIL ACTION:
______________________________________________________________________ ______________________________________________________________________ AGENDA ITEM # C.2.

STAFF REPORT

CITY OF SOLANA BEACH
TO: Honorable Mayor and City Councilmembers
FROM: Gregory Wade, City Manager
MEETING DATE: February 9, 2022
ORIGINATING DEPT: Engineering Department
SUBJECT: City Council Consideration of North Highway 101 Speed Survey and to Provide Direction on Citywide Traffic
Calming Measures; and Consideration of Resolution 2022- 012 Establishing a 35 MPH Speed Limit on North Highway
101
BACKGROUND:

The City Council (Council) periodically evaluates various traffic calming issues and provides direction to Staff for funding and implementation strategies for such projects.

During discussions and development of the City’s Fiscal Year (FY) 2021/22 Work Plan, the Council expressed interest in implementing traffic calming measures in various City neighborhoods subject to involvement from the community members. Several communities expressed interest in traffic calming measures for their neighborhoods.

While Staff addressed a few neighborhoods, there are others that require City Council’s involvement. The neighborhoods and proposed traffic calming measures for which Council consideration is requested are as follow:
• South Sierra Avenue speed cushions, two locations between Border Avenue and Dahlia Drive.
• Santa Helena Drive speed choker, one location between Sun Valley Road and Santa Rosita.
• North Highway 101 speed limit reduction, 40 miles per hour (MPH) to 35 MPH, from Cliff Street to the northerly City boundary.

This item is presented to Council to consider and provide direction on implementing the two proposed traffic calming measures and for the consideration of the North Highway 101 speed survey, and establishment of a speed limit of 35 MPH on North Highway 101 from Cliff Street to the northerly City boundary, subject to approval of Resolution 2022- 012 (Attachment 1).

February 9, 2022
Citywide Traffic Calming Measures