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:
06/30/22 06/30/23 Difference
General Fund $ 14,451,977 $ 14,154,704 $ (297,273)
Measure S Fund 0 1,192,079 1,192,079
Self-Insurance 486,289 203,597 (282,692)
Workers Comp 734,017 719,394 (14,623)
Asset Replacement 1,951,582 2,061,074 109,492
Facilities Replacement 623,096 733,095 109,999
OPEB 206,557 204,081 (2,476)
Pensions 3,218,592 5,003,450 1,784,858
Real Property Acquisition (1,490,620) (1,091,220) 399,400 Total General Fund $ 20,181,490 $ 23,180,254 $ 2,998,764 Other Governmental Funds
The Special Revenue Funds, Capital Improvement Funds, and Debt Service Funds had the following combined activity for FY 2023:
Total Revenues $ 15,538,430
Total Expenditures (13,466,225)
Other Financing Uses (net) 1,440,131
Net Change in Fund Balance $ 3,512,335
Fund Balance
Beginning of Year 14,572,817
End of Year $ 18,085,152
Non-Spendable
47,545
Restricted 16,960,567
Committed -
Assigned -
Unassigned 1,077,040
Fund Balance-June 30, 2023 $ 18,085,152
March 27,2024
FY 2023 ACFR
The Proprietary Funds, which include Sanitation and Other Proprietary Funds, had the following activity for FY 2023 as shown in the following table:
Total Revenues $ 6,136,147
Total Expenditures (3,849,852)
Non-Operating Revenues 146,640
Non-Operating Expenditures (1,188,983)
Change in Net Position $ 1,243,952
Net Position
Beginning of Year 49,796,801
End of Year $ 51,043,753
Net Position
Net Investment in Capital Assets 11,547,573
Restricted for Debt Service -
Unrestricted 39,496,180
Net Position-June 30, 2023 $ 51,043,753
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 City’s auditor 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 (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 2023 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, 2022. Staff is confident that this report will again earn this distinction.
March 27,2024
FY 2023 ACFR
CEQA COMPLIANCE STATEMENT:
Not a project as defined by CEQA.
FISCAL IMPACT:
None with this action.
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, 2022 – June 30, 2023.
2. Accept and file The Auditor’s Communication with Those Charged with Governance letter.
CITY MANAGER’S RECOMMENDATION:
Approve Department Recommendation.
_________________________
Daniel King, Interim City Manager
Attachments:
1. ACFR Fiscal Year Ended June 30, 2023
2. Communication of Internal Control Related Matters Identified in an Audit
3. The Auditor’s Communication with Those Charged with Governance letter
CITY OF SOLANA BEACH, CALIFORNIA
ANNUAL COMPREHENSIVE
FINANCIAL REPORT
FISCAL YEAR ENDING
JUNE 30, 2023
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CITY OF SOLANA BEACH, CAIFORNIA
ANNUAL COMPREHENSIVE FINANCIAL REPORT
FOR THE YEAR ENDED JUNE 30, 2023
PREPARED BY THE FINANCE DEPARTMENT
OF THE CITY OF SOLANA BEACH
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CITY OF SOLANA BEACH, CALIFORNIA
ANNUAL COMPREHENSIVE FINANCIAL REPORT
FOR THE YEAR ENDED JUNE 30, 2023
TABLE OF CONTENTS
INTRODUCTORY SECTION
Letter of Transmittal................................................................................................................................ i GFOA Certificate of Achievement for Excellence in Financial Reporting.............................................xiii City of Solana Beach List of Officials and Advisory Bodies .................................................................xiv Organization Chart.................................................................................................................................xv
FINANCIAL SECTION
Independent Auditor’s Report................................................................................................................. 1 Management’s Discussion and Analysis ................................................................................................ 4 Basic Financial Statements:
Government-Wide Financial Statements:
Statement of Net Position .............................................................................................................. 18 Statement of Activities.................................................................................................................... 19 Fund Financial Statements:
Balance Sheet – Governmental Funds....................................................................................... 23 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position ......................................................................................................................... 24 Statement of Revenues, Expenditures, and Changes in Fund Balances................................... 25 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities................................... 26 Statement of Net Position – Proprietary Funds .......................................................................... 28 Statement of Revenues, Expenses, and Changes in Net Position – Proprietary Funds............ 29 Statement of Cash Flows – Proprietary Funds........................................................................... 30 Statement of Fiduciary Net Position – Fiduciary Funds.............................................................. 32 Statement of Changes in Fiduciary Net Position – Fiduciary Funds .......................................... 33 Notes to the Basic Financial Statements .......................................................................................... 36
REQUIRED SUPPLEMENTARY INFORMATION
Budgetary Comparison Schedule:
General Fund .................................................................................................................................... 78 Miscellaneous Employee Pension Plan:
Schedule of Proportionate Share of the Net Pension Liability......................................................... 79 Schedule of Employer’s Contributions............................................................................................. 80 Safety Employees’ Pension Plan:
Schedule of Proportionate Share of the Net Pension Liability......................................................... 81 Schedule of Employer’s Contributions............................................................................................. 82 Retiree Healthcare Plan:
Schedule of Changes in Net OPEB Liability and Related Ratios.................................................... 83 Schedule of Employer’s Contributions............................................................................................. 84 Notes to the Required Supplementary Information .............................................................................. 85
CITY OF SOLANA BEACH, CALIFORNIA
ANNUAL COMPREHENSIVE FINANCIAL REPORT
FOR THE YEAR ENDED JUNE 30, 2023
TABLE OF CONTENTS
Page
COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES
Combining Balance Sheet – Nonmajor Governmental Funds ............................................................. 89 Combining Statement of Revenues, Expenditures and
Changes in Fund Balance – Nonmajor Governmental Funds ........................................................ 95 Budgetary Comparison Schedules:
Special Revenue Funds:
Gas Tax .................................................................................................................................... 101 TRANSNET............................................................................................................................... 102 Municipal Improvements District............................................................................................... 103 Lighting District ........................................................................................................................ 104 COPS........................................................................................................................................ 105 Public Safety ............................................................................................................................. 106 Fire Mitigation ........................................................................................................................... 107 CDBG........................................................................................................................................ 108 Coastal Area Business/Visitor Assistance and Enhancement ................................................. 109 Miscellaneous Grants ............................................................................................................... 110 Developer Pass-Thru................................................................................................................ 111 Housing..................................................................................................................................... 112 Camp Programs........................................................................................................................ 113 SB1 Streets & Roads................................................................................................................ 114 Capital Projects Funds
City CIP..................................................................................................................................... 115 Sand Replenishment ................................................................................................................ 116 Debt Service Fund:
City Debt Service ...................................................................................................................... 117 Combining Statement of Fiduciary Net Position – All Custodial Funds.............................................. 119 Combining Statement of Changes in Fiduciary Net Position – All Custodial Funds ......................... 120
STATISTICAL SECTION
Net Position by Component................................................................................................................ 121 Changes in Net Position ..................................................................................................................... 123 Fund Balances – Governmental Funds.............................................................................................. 125 Changes in Fund Balances – Governmental Funds........................................................................... 127 Assessed Value and Estimated Actual Value of Taxable Property.................................................... 129 Direct and Overlapping Property Tax Rates....................................................................................... 130 Principal Property Taxpayers ............................................................................................................. 132 Property Tax Levies and Collections.................................................................................................. 133 Ratios of Outstanding Debt by Type .................................................................................................. 134 Direct and Overlapping Governmental Activities Debt ....................................................................... 135 Legal Debt Margin Information ........................................................................................................... 136
CITY OF SOLANA BEACH, CALIFORNIA
ANNUAL COMPREHENSIVE FINANCIAL REPORT
FOR THE YEAR ENDED JUNE 30, 2023
TABLE OF CONTENTS
STATISTICAL SECTION (continued)
Pledged Revenue Coverage .............................................................................................................. 137 Demographic and Economic Statistics............................................................................................... 138 25 Major Employers – San Diego County .......................................................................................... 139 Full-Time-Equivalent City Employees by Function/Program.............................................................. 140 Operating Indicators by Function/Program......................................................................................... 142 Capital Assets Statistics by Function/Program................................................................................... 144
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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 30, 2024
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, 2023.
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; 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 is also 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
Annual Audit
Davis Farr 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, 2023, 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, 2023, provided no instance of material weakness 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 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 12,601 residents per the Bureau of Labor and Statistics.
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 of 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. ii
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 annually 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 2023, the City Council approved a two-year budget for Fiscal Years (FY) 2024 and 2025. The budget is amended from time to time during this two-year budget cycle, with budget adjustments brought before the City Council for review and approval. The final General Fund Budget as amended is presented in the Required Supplementary Information section of this report.
iii
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. As previously noted, 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 2024 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 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 1.3% in the first quarter of 2023.
In July 2023, the U.S. Bureau of Labor Statistics (BLS) reported the Consumer Price Index for All Urban Consumers (CPI-U) increased 3.2% before seasonal adjustment after rising
0.2% for the month of June. This reflected the slowing economy due to actions by the federal reserve including raising interest rates.
The index for all items rose 3.2% over the past 12 months, ending July 2023.
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 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. iv
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 3.9% in July 2023. The region’s unemployment rate remained lower than California’s unemployment rate of 4.6% in July 2023.
Solana Beach housing prices have continued to climb. Despite higher mortgage rates and with continued low inventory of available homes price growth continues. According to the San Diego Association of Realtors, the median single family home price in Solana Beach in December 2022 was $2.6 Million, up 18% from the year prior. The San Diego region’s median home price was $935,000 in December 2022, an increase of 11% as compared to the same month in 2021.
In June 2023, Governor Gavin Newsom signed a $310 billion budget for the 2024 fiscal year, an increase of 0.65% from the adopted FY 2023 budget. The state budget includes a $225.9 Billion General Fund, a $8.6 billion or 3.7% decrease, as compared to the adopted FY 2023 budget appropriations. The largest increases were in Health & Human Services ($12.2 billion), Education K-12 ($2 billion) and General Government Statewide Expenditures ($3 billion).
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 keep 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 2023 increased $831,546 to $9,962,980, or 9.1%, as compared to the prior year. Regular Sales tax receipts increased $235,657 to $4,648,922, or by 5.3%, which is due to the continued strong recovery in sales from the negative impact of the pandemic as well as the impact of inflation on the cost of taxable goods. In addition, the City of Solana Beach voters approved a local 1% sales and use tax measure for “Solana Beach Streets, Parks, Beaches, and Services Measure” (Measure S). These new sales tax receipts totaled $1,197,045 for FY 2023, which was only the first quarter of collection as this new tax was implemented in April.
Overall, the City’s General Fund revenues increased by $4,942,246, or 20.6%, from $23,935,023 in FY 2022 to $28,877,269 in FY 2023.
For FY 2024, 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.
It is the City’s continued goal not to rely on General Fund reserves to operate the City annually.
v
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. This policy, as in the adoption of the FYs 2024 and 2025 Budgets, is one that has been continuously adhered to by Council.
The Equipment 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 2024 and 2025 budget process, the Council again ensured that funds were appropriated to maintain adequate reserves in the Asset Replacement Fund.
The City established a Facilities Replacement Fund to ensure that funds are available in the future for the replacement of buildings and improvements. Through the end of FY 2023, the balance in this fund is $733,095.
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 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 gain for all funds for the fiscal year ended June 30, 2023, was $688,090 ($568,651 investment income received plus $119,439 gain on the FMV), an increase of $2,122,009 from the prior fiscal year’s investment loss amount of $1,433,919 ($582,910 investment income received minus $2,016,829 loss on the FMV). vi
Major Projects and Financial Planning
Annual Street Maintenance Program
The City has been increasing its level of commitment to maintain city streets. In 2021, a Citywide pavement condition assessment was performed to determine the most effective way to budget, repair, replace and preserve City streets. Based upon this condition assessment report, the consultant prepared a priority list for the City’s pavement repairs and maintenance.
This list was used to select street segments for the street maintenance and repair program.
The 2024 Annual Street Maintenance Program is currently being designed and will be presented to the City Council for consideration in early spring 2024.
The City strives to prioritize the streets most in need of maintenance. Overlay is an important part of preserving streets. This limits the need for major repairs which are much more costly to the City. The City Council approved allocating additional funds to this program at the end of FY 2022 and budgeted utilizing Measure S tax towards the program for FY 2024 and FY 2025 as this was identified as a priority of Measure S supporters. This signifies Council’s commitment to this very impactful program.
Annual Sewer Main Maintenance Storm Drain Rehabilitation Program The City budgets annually to clean sewer mains and rehabilitate Storm Drains citywide. The City maintains annual service agreements for basic cleaning of sewer mains and as-needed maintenance services for the City’s storm drain system that includes an annual scheduled cleaning of an estimated 255,000 feet of sewer line. Preventative maintenance is also performed from time to time on low-flow diverters located at the Fletcher Cove Park and Seascape Sur Beach Access, the siphon structure in San Elijo Lagoon, sewer laterals at several City facilities and over 35 storm drain catch basins throughout the City.
In addition to routine cleaning and preventative maintenance, the service agreement includes a video inspection component and an “on-call” component to the Agreements to handle investigations, emergencies and spills as directed by Staff. These video inspections are also used to prioritize cleaning and replacement projects. Targeted prioritization limits the risk of sewer spills and storm drain related damage to roads and private properties. vii
Marine Safety Center Design
The existing Marine Safety Center (MSC) at Fletcher Cove, shown above, 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 2017, Staff worked with SDA on the preparation of the Fletcher Cove MSC Feasibility/Needs Assessment Study. The results of the Study indicated 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. Since that time, Staff has been working 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 aboveground option. At the October 2020 Council meeting, a refined version of the above-ground option was presented.
During the past fiscal year, in collaboration with the City Staff and following the City Council’s direction, the consultant team continued the design work on the preferred design options.
Story poles were installed, and preliminary view assessment was carried out by Staff. At the City Council meeting on February 8, 2023, the City Council provided direction to Staff based on a review of potential view impacts associated with the preliminary design. The project will be moving into the final design phase in FY 2023 subject to the City Council’s approval of the preliminary design. A total of $500,000 was appropriated in the FY 2024 budget for design and engineering for the project.
At their meeting on January 24, 2024, Council directed Staff to proceed with the permitting process for a new Marine Safety Center building by installing story poles for the proposed project (shown on next page).
viii
La Colonia Park TOT Lot
In FY 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 2010 and preliminary design of the park during FY 2011.
More recently, Staff has been engaged with Van Dyke Landscape Architects (VDLA) to design a new Tot Lot at La Colonia Park. In FY 2022 the City budgeted $479,000 to design and construct the new Tot Lot and renovate the playground.
The estimated cost for the design and construction of the Tot Lot is $1,500,000. A Prop 68 Parks grant was received in the amount of $233,089, which includes $186,471 from the State and a City match of $46,618. Staff has also successfully submitted a grant application to the County of San Diego for the Neighborhood Reinvestment Program and was awarded $50,000. The project began construction in late 2023.
ix
La Colon ia Tot Lot - Addt' I Elements l111
llffl
with Swa le As-ls
Tug Rope
Climbing
Rocks r"
Climbing
Boulder
Disc Swing
School Aged
Structures
2 Picnic Table
Preschool Structure
L.AND",C,APf
AAO<
Red lines indicate required
equipment fall zones
Existing Swale
---Unchanged
Additionally, with the City’s purchase of the property immediately north of the new Skate Park, an assessment of how to incorporate the property into the existing park is being conducted by Staff and VDLA.
Fletcher Cove Community Park and Community Center Improvements This project is to perform maintenance on various components of Fletcher Cove Park and the Community Center.
Work also included reconstruction of the Tot Lot at Fletcher Cove. The construction of Fletcher Cove Park Tot Lot was awarded by the City Council in February 2023 and completed in July 2023. The total construction cost was $460,600.
Other work included repairs to the community center including a new roof and siding which is now complete. Finally, these improvements will also include reconstructing the handrail and lower portion of the concrete beach access ramp, which recently was approved by the Coastal Commission. Maintenance on the boardwalk, sun plaza and basketball court have been completed during late April and early summer 2023. x
Fletcher Cove Tot Lot
An inviting umbrella stands over a variety of play opportunities that focuses on inclusivity of all ages and all abilities.
Elements Include:
• Central Disc Net Climber
• Slide
• Sound Play
• Monkey Bars
• Custom Activity Panels
• Swing Set
• Boogie Board ,
Lomas Santa Fe Corridor Project
The project study area for the Lomas Santa Fe (LSF) Drive Corridor Project extends from Cedros Avenue on the east 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, Phase III of the project was completed. Phase III of the project included the final design of the improvements to LSF and was funded primarily through a grant from SANDAG. Some of the elements designed during Phase III include a multi-use 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. Staff is in the process of preparing a stand-alone construction plan from Highland Drive to the I-5 freeway consistent with the available Federal funding that has been successfully awarded due to significant efforts by Congressman Levin’s office for this project.
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 ACFR for the fiscal year ended June 30, 2022. This was the twenty-first year in the past twenty-two years that the City has received this award. To be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized annual comprehensive 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 annual comprehensive 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.
xii
The preparation of the Annual Comprehensive Financial Report in accordance with the GASB 34 financial reporting model was made possible by the dedicated work of the Finance Department staff. We would also like to thank the Mayor and Council for their continued support in maintaining the highest standards of professionalism in the management of the City’s finances.
Respectfully submitted, Respectfully submitted,
Gregory Wade Rachel Jacobs
City Manager Finance Director/City Treasurer
xiii
Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Solana Beach
California
For its Annual Comprehensive
Financial Report
For the Fiscal Year Ended
June 30, 2022
Executive Director/CEO
xiii
e
CITY OF SOLANA BEACH
LIST OF OFFICIALS AND ADVISORY BODIES
CITY COUNCIL
LESA HEEBNER
Mayor
JEWEL EDSON
Deputy Mayor
KRISTI BECKER DAVID A. ZITO JILL MACDONALD
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
Rachel Jacobs, 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 Director
xiv
CITY OF SOLANA BEACH
Organizational Chart
Fiscal Year 2022-2023
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
- Support Services - Building Services Preparedness - Traffic Safety - Human Resources - Marine Safety - Street Sweeping
- Information Systems - Junior Lifeguards - Park Maintenance - Risk Management - Shoreline Protection - Public Facilities - Street Lighting
- Sanitation
- Municipal Improvement
Districts
Citizens
City Council
Public Works Community
Services
City Attorney
City Manager
Community
Development Public Safety
xv
FINANCIAL SECTION
Independent Auditor’s Report
City Council
City of Solana Beach
City of Solana Beach, California
Report on the Audit of the Financial Statements
Opinions
We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of City of Solana Beach (the “City”), as of and for the year June 30, 2023, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents.
In our opinion, the accompanying financial statements present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City, as of June 30, 2023, and the respective changes in financial position and, 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 audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
Responsibilities of Management for the Financial Statements The City’s management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of 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 one year after the date that the financial statements are issued.
1 DavisFarr
CERTIFIED PUBLIC ACCOUNTANTS
Davis Farr LLP
18201 Von Karman Avenue I Suite 1100 I Irvine, CA 92612 Main: 949.474.2020 I Fax: 949.263.5520
Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or 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, 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.
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis, budgetary comparison schedule for the General Fund and pension and other post-employment benefit schedules 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 Report on Summarized Comparative Information
The financial statements of the City for the year ended June 30, 2022 were audited by other auditors whose report dated February 2, 2023 expressed an unmodified opinion on those financial statements. In our opinion, the summarized comparative information presented herein as of and for the year ended June 30, 2022 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 and are not a required part of the basic financial statements.
The combining and individual nonmajor fund financial statements and budgetary schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional 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 nonmajor fund financial statements and budgetary schedules are fairly stated, in all material respects, in relation to the basic financial statements as a whole.
Other Information
Management is responsible for the other information included in the Annual Comprehensive Financial Report. The other information comprises the introductory section and statistical section but does not include the financial statements and our auditor's report thereon. Our opinions on the financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon. In connection with our audit of the 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 30, 2024 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 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.
Irvine, California
January 30, 2024
3 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, 2023 (Fiscal Year (FY) 2023). 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 $112,974,537, or by $18,520,158, due to FY 2023 operations.
Governmental net position equaled $61,930,784.
The total revenues for all governmental fund sources were $47,406,498. The total expenditures for all governmental funds were $28,886,340. The General Fund reported an excess of revenues over expenditures and other financing sources and uses by $2,998,764.
The General Fund’s actual resources received exceeded the final revenue budget by $5,624,929 while actual expenditures were $1,123,948 less than the final budget.
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 the current year’s revenues and expenses are accounted for regardless of when cash is received or paid.
4 These two statements report the City’s net position and changes thereto. Net position, the difference between assets and liabilities, is 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 financial health is improving or deteriorating. However, it is important to consider other nonfinancial 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 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 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 governmental funds through the Reconciliation of the Fund Financial Statements to the Government-Wide Financial Statements. 5 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.
2023 2022 2023 2022 2023 2022
Assets:
$ 41,783,836$ 51,169,143$ 49,880,265$ 100,016,739$ 91,664,101$ 48,847,596 Capital assets, net 41,808,198 34,056,404 17,094,784 17,533,954 58,902,982 51,590,358 Total Assets 90,655,794 75,840,240 68,263,927 67,414,219 158,919,721 143,254,459 Deferred Outflows 8,005,746 3,817,131 646,308 200,619 8,652,054 4,017,750 Liabilities:
27,355,767 19,861,127 17,385,545 16,963,985 44,741,312 36,825,112 Other liabilities 7,582,795 6,815,603 336,252 384,932 7,919,047 7,200,535 Total Liabilities 34,938,562 26,676,730 17,721,797 17,348,917 52,660,359 44,025,647 Deferred Inflows 1,792,194 8,323,063 144,685 469,120 1,936,879 8,792,183 Net Position:
34,677,741 26,396,682 11,547,573 11,656,188 46,225,314 38,052,870 Restricted 21,964,017 17,970,956 - - 21,964,017 17,970,956 Unrestricted 5,289,026 289,940 39,496,180 38,140,613 44,785,206 38,430,553 Total Net Position $ 44,657,578$ 51,043,753$ 49,796,801$ 112,974,537$ 94,454,379$ 61,930,784 Net investment in
capital assets
Table 1
City of Solana Beach Net Position
Governmental
Activities
Business
Activities Total
Current and
other assets
Long-term debt
outstanding
6 The City’s combined net position for the fiscal year ended June 30, 2023, was $112,974,537. The City’s net position for governmental activities increased from $44,657,578 to $61,930,784. The following is an explanation of the governmental activity changes between fiscal years as shown in Table 1:
Current and other assets increased $7,063,760 or 16.9% primarily due to increased cash and investments.
Capital Assets net of depreciation increased $7,751,794 or 22.8% mainly due to the Sand Retention project. More information is provided following Table 4. Other liabilities increased by $767,192 or 11.3% mainly due to the increase in deposits payable related to residential and commercial development activity.
Changes related to Business activities are as follows:
Current and other assets increased $1,288,878 or 2.6% primarily due to increased cash and investments and the investment in San Elijo Joint Powers Authority offset by decreases in receivables.
Capital Assets net of depreciation decreased $439,170 or 2.5% primarily due to current year depreciation on existing assets. More information is provided in the following Table
4. Other liabilities decreased by $48,680 or 12.6% mainly due to the decrease in accounts payable at year end.
Governmental Activities
The cost of all Governmental activities in FY 2023 was $23,847,505 as shown on Tables 2 and
2.1. Of this cost, $4,339,427 was paid for by those who directly benefited from the programs; $11,638,857 was subsidized by grants received from other governmental organizations for both capital and operating activities; and $7,869,221 was financed through general City revenues. 7 Items of significance within Table 2 are:
Revenues:
Operating and Capital grants and contributions increased by a net 254% or $8,351,082 over the prior fiscal year amount mainly due to Sand Replenishment grant funds. 2022 2022 2022
Revenues:
Program revenues:
Charges for services $ 4,339,427 $ 3,637,223 $ 5,847,517 $ 5,818,187 $ 10,186,944 $ 9,455,410 Operating grants
and contributions 3,172,914 3,287,775 - - 3,172,914 3,287,775 Capital grants
and contributions 8,465,943 - - - 8,465,943 -
General revenues:
Property tax 11,638,632 10,523,133 - - 11,638,632 10,523,133 Sales & Use Tax 5,845,967 4,413,265 - - 5,845,967 4,413,265 Transient Tax 2,904,236 2,575,173 - - 2,904,236 2,575,173 Franchise Tax 897,472 873,791 - - 897,472 873,791
Motor VLF - unrestricted 2,053,486 3,880,489 - - 2,053,486 3,880,489 Use of Money and Property 783,458 (399,689) 149,640 35,005 933,098 (364,684) Other 1,019,176 3,342,715 288,630 365,344 1,307,806 3,708,059 Total revenues 41,120,711 32,133,875 6,285,787 6,218,536 47,406,498 38,352,411 Expenses:
General government 4,490,903 4,569,515 - - 4,490,903 4,569,515 Public safety 11,414,093 13,906,293 - - 11,414,093 13,906,293 Public works 5,377,186 5,411,937 - - 5,377,186 5,411,937 Community Development 1,260,610 1,505,023 - - 1,260,610 1,505,023 Community Services 919,234 1,218,243 - - 919,234 1,218,243 Interest 385,479 346,224 - - 385,479 346,224
Sanitation - - 5,019,606 4,308,057 5,019,606 4,308,057
Solana Energy - - 19,229 189,465 19,229 189,465
Total expenses 23,847,505 26,957,235 5,038,835 4,497,522 28,886,340 31,454,757 Increase/(decrease)
in net position 17,273,206 5,176,640 1,246,952 1,721,014 18,520,158 6,897,654 Net position - July 1 44,657,578 39,480,938 49,796,801 48,075,787 94,454,379 87,556,725 Net position - June 30 $ 61,930,784 $ 44,657,578 $ 51,043,753 $ 49,796,801 $ 112,974,537 $ 94,454,379 Table 2
City of Solana Beach Changes in Net Position
Governmental Business Total
Activities Activities
2023 2023 2023
8 Tax revenue including Property, Sales & Use, Transient Occupancy, Franchise and Other (comprised of the Motor Vehicle In-Lieu, Benefit and National Pollution Discharge Elimination Fees as well as Real Property Transfer taxes) increased by a combined net
4.8% or $1.1 million mainly driven by a 12.8% or $329k increase in Transient Occupancy taxes and a 32.5% or $1.4 million increase in Sales & Use taxes.
Expenses:
General Government expenses decreased in FY 2023 by 1.7% or $78k from the prior fiscal year primarily due to changes in the City’s Pension and Other Pension Employee Benefits (OPEB) liabilities.
Public Safety decreased by 17.9% or $2.5 million due decreased admin costs, OPEB liabilities, and equipment maintenance costs.
Solana Energy Alliance expenses decreased to near zero due to the transition of operations to the Clean Energy Alliance in FY 2021. As of June 30, 2022, Clean Energy Alliance was operating on its own, however a full reconciliation has yet to be completed to wrap up some remaining items on the City’s books.
Fiscal Year 2023
Governmental Activities
(Graphic representation of Table 2 in percentages)
9 Investment
Income Other 2%
4%
Capital
Grants 21 %
Operating
Grants 8%
Charges for
Services
11 %
Sources of Revenue
Property Tax
28%
5%
Sales & Use
Tax 14%
Transient &
Franchise
Tax 9%
Program Expenses
Interest on
LT Debt, 2% _ _ _,~ - - -
General Govt,
19%
Comm
Developmnt,
5%
Public Safety,
48%
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 in Table 2.1. The net cost shows the extent to which the City’s general taxes support each of the City’s programs.
Total resources available during the year to finance governmental operations were $85,778,289 consisting of a net position on July 1, 2022, of $44,657,578, program revenues of $15,978,284, and general revenues of $25,142,427. Total governmental activities during the year were $23,847,505, and as a result, net position increased by $17,273,206 to $61,930,784.
General government $ 4,490,903 $ 4,569,515 $ 1,126,175 $ 16,529 $ (3,364,728) $ (4,552,986) Public safety 11,414,093 13,906,293 881,452 837,769 (10,532,641) (13,068,524) Public works 5,377,186 5,411,937 3,191,868 4,239,591 (2,185,318) (1,172,346) Community development 1,260,610 1,505,023 10,064,991 1,162,512 8,804,381 (342,511) Community services 919, 234 1,218,243 713,798 668,597 (205,436) (549,646) Interest on long-term debt 385,479 346,224 - - (385,479) (346,224) Totals $ 23,847,505 $ 26,957,235 $ 15,978,284 $ 6,924,998 $ (7,869,221) $ (20,032,237) of Services Revenues of Services
2023 2022 2023 2022 2023 2022
Table 2.1
Net Cost of Governmental Activities
Total Cost Program Net Cost
10 15,000,000
10,000,000
5,000,000
(5,000,000)
(1 0,000,000)
(1 5,000,000)
Cost of Services, Program Revenues & Net Cost Governmental Activities
Comm
Gen Govt Public Safety Public Works Development Comm Services - - I - --
■ Cost of Services ■ Program Revenues Net Cost
Interest
-
Business Type Activities
Net position of the Proprietary Fund (Business Type activities) on June 30, 2023, as reflected in Table 1, was $51,043,753. As shown in Table 3, amounts paid by users of the Sanitation system and other operating revenue were $5,846,765 while the cost of providing Sanitation Services in FY 2023 was $5,019,606 resulting in a change in net position of $827,159. The total cost of providing Solana Energy Alliance services was $19,229 while program revenues totaled $752 resulting in a change in net position of ($18,477).
2023 2022 2023 2022 2023 2022
Sanitation $ 4, 5,019,606 $ 5, 308,057 $ 5, 846,765 $ 816,828 $ 827,159 $ 1,508,771 Solana Energy Alliance 19,229 189,465 752 1,359 (18,477) (188,106) Total Business Activities $ 4, 5,038,835 $ 5, 497,522 $ 5, 847,517 $ 818,187 $ 808,682 $ 1,320,665 of Services Revenue of Services
Table 3
Net Cost of Business Activities
Total Cost Program Net Cost
11 $7,000,000
$6,000,000
$5,000,000
$4,000,000
$3,000,000
$2,000,000
$1,000,000
$-
$(1,000,000)
Cost of Services, Program Revenues & Net Cost
Business Activities
Fiscal Year 2023
Sanitation Solana Energy Alliance
■ Cost of Services ■ Program Revenues ■ Net Cost
Governmental Funds
The net change in Governmental Fund Balances is shown below in Table 4:
The General Fund - Fund Balance increased by $2,998,764 or 14.9% to $23,180,254 from June 30, 2022, to June 30, 2023. This was mainly due to a 12.8% ($329k) increase in transient occupancy tax and a 32.5% ($1.4 million) increase in sales tax revenues. Property Tax revenue increased 10.6% ($1.1 million) primarily due to Prop 13 assessment increases and new assessments from construction and sales.
General Fund Budgetary Highlights
Revenues:
Actual revenues received were above the final year-end budget by $5,624,929 or 13.0%. The largest variance was Sales tax with a $1.7 million positive variance due to the continued improvement in the local economy following COVID-19. Another large variance was Transient Occupancy Tax revenue variance to budget of a positive $709k due mainly to the growth in shortterm vacation rentals.
There was a significant revenue variance in the Capital Projects Sand Replenishment Fund due to the receipt of the Sand Project Grant revenue funds, which was not budgeted as revenue.
Expenditures:
Actual expenditures incurred were lower than the final budget by $1,123,948 or 4.3%. The largest variance to budget was in Public Works which came in $308k under budget. This was mainly due to the deferred maintenance projects shifting into the next fiscal year. General Government department expenditures were below the final budget by $464k. This was mainly the result of vacancy savings and professional service savings in legal, information system and building permit services.
Revenues:
Taxes, Licenses, Fees
and Intergovernmental $ 23,198 $ 20,448 $ 8,913 $ 396 $ - $ - $ 5,204 $ 5,354 $ 37,314 $ 26,198 Charges for Services 890 1,044 - - 265 1,056 646 655 1,802 2,754 Other 4,783 2,444 5 (27) 337 253 168 517 5,294 3,188
Total Revenues 28,871 23,935 8,917 369 602 1,310 6,019 6,525 44,410 32,139 Expenditures:
Current 24,209 21,189 - - 2 2 2,347 2,380 26,557 23,571 Capital Outlay 178 370 9,012 168 1,147 463 416 522 10,752 1,522 Debt 46 - - - - - 544 220 588 220
Total Expenditures 24,433 21,558 9,012 168 1,148 465 3,306 3,123 37,899 25,314 Net Transfers (1,440) 259 - - 2,842 1,182 (1,402) (1,440) - - Net Change in
Fund Balances $ 2,999 $ 2,636 $ (95) $ 202 $ 2,296 $ 2,026 $ 1,311 $ 1,962 $ 6,511 $ 6,826 Table 4
City of Solana Beach Governmental Funds
Changes in Fund Balances (In Thousands)
General Fund Capital Projects Fund Capital Projects Fund Other Governmental Total Sand Replenishment City CIP Funds 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022
12 Actual Expenditures, in the Capital Projects City CIP fund, were $1.8 million lower than budgeted due to ongoing projects that will be completed in FY 24.
Ending Fund Balance: Ending Fund Balance for the year increased by 14.9% from FY 2022, for a total ending balance of $23,180,254. Included in the fund balance are non-spendable, restricted, committed, and assigned funds which total $13,124,899. The unassigned portion is the part of the fund balance that is available for use without constraints established by legal requirements and totals $10,055,355.
CAPITAL ASSET AND DEBT ADMINISTRATION
Capital Assets
The capital assets of the City are those assets that are used in the performance of City functions including infrastructure assets. Capital assets include equipment, buildings, land, park facilities, and roads.
As of June 30, 2023, net capital assets of the governmental activities totaled $41,808,198 and the net capital assets of the business-type activities totaled $17,094,784. Depreciation of capital assets is recognized in 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 the Annual Pavement and Storm Drain projects, La Colonia Park Improvements, Lomas Santa Fe Drive Corridor Improvements, Marine Safety Center Renovations, and sewer pipeline improvements and replacement projects.
Debt
At year-end, the City had $7,299,507 in governmental type debt and $15,766,391 in proprietary debt (both net of any premiums or discounts) totaling $23,065,898. In addition to Bonds and Leases, debt as displayed here in the MD&A includes Claims, Judgements and Compensated Absences. These are liabilities of the city and amount to $1,830 per capita as of June 30, 2023, which is a decrease of $32 from $1,862 on June 30, 2022. 2023 2022
Land $ 5,337,440 $ 5,337,440 $ 111,706 $ 111,706 $ 5,449,146 $ 5,449,146 Buildings 9,678,488 10,285,398 6,134,497 6,134,497 15,812,985 16,419,895 Equipment &
Vehicles 874,744 1,219,816 231,452 247,984 1,106,196 1,467,800 Infrastructure 15,135,078 15,118,543 10,554,309 10,976,947 25,689,387 26,095,490 Work in Progress 10,782,448 2,095,207 62,820 62,820 10,845,268 2,158,027 $ 41,808,198 $ 34,056,404 $ 17,094,784 $ 17,533,954 $ 58,902,982 $ 51,590,358 2023 2022 2023 2022
Table 5
City of Solana Beach Capital Assets at Year-End
(Net of Depreciation)
Governmental Business
Total
Activities Activities
13 See Table 6 below and Notes 9 through 11 to the financial statements for detailed descriptions.
Refunding lease Bond $ - $ 145,000 $ - $ - $ - $ 145,000 Loan Payable 291,010 349,819 - - 291,010 349,819
SEJPA Loan Payable-2017 - - 10,147,500 10,385,000 10,147,500 10,385,000 2017 Wastewater
Refunding Bond - - 5,215,000 5,520,000 5,215,000 5,520,000 TransNet Bond 5,500,000 5,500,000 - - 5,500,000 5,500,000 Bond premiums - - 332,211 357,766 332,211 357,766
Bond discounts - (577) - - - (577)
Claims and judgements 838,000 1,098,000 - - 838,000 1,098,000 Compensated
absences 670,497 546,979 71,680 52,449 742,177 599,428
$ 7,299,507 $ 7,639,221 $ 15,766,391 $ 16,315,215 $ 23,065,898 $ 23,954,436 2022
Table 6
City of Solana Beach Outstanding Debt at Year-End
Governmental Business Total Activities Activities
2023 2022 2023 2022 2023
14 NEXT YEAR’S BUDGET AND ECONOMIC FACTORS
In June 2023, the City Council adopted a two-year budget for fiscal years ending June 30, 2024, and June 30, 2025.
In considering the City Budget, the City Council and management focused on the challenge of balancing the budget amid economic climate rebound after the COVID-19 pandemic. Fiscal Years 2024 and 2025 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 2024 by $963k, or 3.1%, as compared to the FY 2023 actual revenues. The primary increases are Sales tax, Transient Occupancy tax, and Measure S transaction tax.
General Fund expenditures are projected to increase by $703k or 2.50% in FY 2024 compared to FY 2023 actual expenditures. This is due to the COLA and CPI increase.
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: https://www.cityofsolanabeach.org 15 BASIC FINANCIAL STATEMENTS
16 GOVERNMENT-WIDE FINANCIAL STATEMENTS
17 CITY OF SOLANA BEACH, CALIFORNIA
STATEMENT OF NET POSITION
JUNE 30, 2023
(WITH COMPARATIVE TOTALS FOR JUNE 30, 2022)
Governmental Business-Type
Activities Activities 2023 2022
ASSETS
Cash and investments (Note 3) $ 41,028,483 $ 12,424,542 $ 53,453,025 $ 48,125,425 Restricted cash and investments (Note 3) 5,003,450 - 5,003,450 3,218,592 Investment in joint venture (Note 13) - 37,054,566 37,054,566 36,460,678 Receivables:
Accounts, net 1,224,378 121,560 1,345,938 1,481,032
Interest 100,188 30,049 130,237 7,722
Intergovernmental 2,135,538 804,851 2,940,389 2,186,712 Internal balances (733,575) 733,575 - -
Inventories 47,545 - 47,545 47,545
Prepaid costs 41,589 - 41,589 136,395
Capital assets not being depreciated (Note 4) 16,119,888 174,526 16,294,414 7,607,173 Capital assets, net of accumulated depreciation (Note 4) 25,688,310 16,920,258 42,608,568 43,983,185 Total Assets 90,655,794 68,263,927 158,919,721 143,254,459
DEFERRED OUTFLOWS OF RESOURCES
Pension related (Note 5) 7,918,832 639,292 8,558,124 3,873,790 OPEB related (Note 6) 86,914 7,016 93,930 143,960
Total Deferred Outflows of Resources 8,005,746 646,308 8,652,054 4,017,750
LIABILITIES
Accounts payable 2,369,367 67,655 2,437,022 2,509,432
Accrued liabilities 259,192 64,966 324,158 426,177
Accrued interest payable 605 203,631 204,236 211,211
Deposits payable 4,403,446 - 4,403,446 3,610,384
Unearned revenue 550,185 - 550,185 443,331
Noncurrent Liabilities:
Due within one year: bonds, loans,
claims, compensated absences (Note 9) 747,792 601,550 1,349,342 1,349,127 Due in more than one year:
Net pension liability (Note 5) 17,982,962 1,451,775 19,434,737 10,454,487 Net OPEB liability (Note 6) 2,073,298 167,379 2,240,677 2,416,189 Bonds, loans, claims,
compensated absences (Note 9) 6,551,715 15,164,841 21,716,556 22,605,309 Total Liabilities 34,938,562 17,721,797 52,660,359 44,025,647
DEFERRED INFLOWS OF RESOURCES
Pension related (Note 5) 1,364,040 110,120 1,474,160 8,041,888 OPEB related (Note 6) 428,154 34,565 462,719 750,295
Total Deferred Inflows of Resources 1,792,194 144,685 1,936,879 8,792,183
NET POSITION
Net investment in capital assets (Note 11) 34,677,741 11,547,573 46,225,314 38,052,870 Restricted:
Redevelopment activities 2,454,458 - 2,454,458 2,389,310 Public safety 1,122,185 - 1,122,185 1,005,411
Parks and recreation 38,306 - 38,306 138,697
Public works 4,782,223 - 4,782,223 4,685,845
Capital projects 8,537,510 - 8,537,510 6,507,277
Debt service 25,885 - 25,885 25,824
Pensions 5,003,450 - 5,003,450 3,218,592
Unrestricted 5,289,026 39,496,180 44,785,206 38,430,553 Total Net Position $ 61,930,784 $ 51,043,753 $ 112,974,537 $ 94,454,379 Total
Primary Government
See Accompanying Notes to the Basic Financial Statements. 18 CITY OF SOLANA BEACH, CALIFORNIA
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2023
(WITH COMPARATIVE TOTALS FOR JUNE 30, 2022)
Operating Capital
Charges for Contributions Contributions
Expenses Services and Grants and Grants
Functions/Programs:
Primary Government:
Governmental Activities:
General government $ 4,490,903 $ 1,126,175 $ - $ -
Public safety 11,414,093 463,056 418,396 -
Community development 1,260,610 1,597,048 2,000 8,465,943 Community services 919,234 548,527 165,271 -
Public works 5,377,186 604,621 2,587,247 -
Interest 385,479 - - -
Total Governmental Activities 23,847,505 4,339,427 3,172,914 8,465,943 Business-Type Activities:
Sanitation Fund 5,019,606 5,846,765 - -
Solana Energy Alliance Fund 19,229 752 - -
Total Business-Type Activities 5,038,835 5,847,517 - -
Total Primary Government $ 28,886,340 $ 10,186,944 $ 3,172,914 $ 8,465,943 General Revenues:
Taxes:
Property taxes, levied for general purpose
Sales taxes
Transient occupancy taxes
Franchise taxes
Motor Vehicle in Lieu - unrestricted
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 the Basic Financial Statements. 19 Governmental Business-Type
Activities Activities 2023 2022
$ (3,364,728) $ - $ (3,364,728) $ (3,347,438)
(10,532,641) (10,532,641) (13,068,524) -
8,804,381 - 8,804,381 (342,511)
(205,436) - (205,436) (549,646)
(2,185,318) - (2,185,318) (716,427)
(385,479) - (385,479) (346,224)
(7,869,221) - (7,869,221) (18,370,770)
- 827,159 827,159 1,508,771
- (18,477) (18,477) (188,106)
- 808,682 808,682 1,320,665
(7,869,221) 808,682 (7,060,539) (17,050,105)
11,638,632 - 11,638,632 10,844,785
5,845,967 - 5,845,967 4,413,265
2,904,236 - 2,904,236 2,575,173
897,472 - 897,472 873,791
2,053,486 - 2,053,486 1,897,370
783,458 149,640 933,098 (364,684)
1,019,176 288,630 1,307,806 3,708,059
25,142,427 438,270 25,580,697 23,947,759
17,273,206 1,246,952 18,520,158 6,897,654
44,657,578 49,796,801 94,454,379 87,556,725
$ 61,930,784 $ 51,043,753 $ 112,974,537 $ 94,454,379
Net (Expense) Revenue and Changes in Net Position
Primary Government
Total
20 FUND FINANCIAL STATEMENTS
Governmental Fund Financial Statements
Proprietary Fund Financial Statements
Fiduciary Fund Financial Statements
21 GOVERNMENTAL FUND FINANCIAL STATEMENTS
22 CITY OF SOLANA BEACH, CALIFORNIA
BALANCE SHEET
GOVERNMENTAL FUNDS
JUNE 30, 2023
(WITH COMPARATIVE TOTALS FOR JUNE 30, 2022)
Other
Sand Governmental
General Replenishment City CIP Funds 2023 2022
ASSETS
Cash and investments $ 21,999,812 $ 1,198,762 $ 6,934,876 $ 10,895,033 $ 41,028,483 $ 37,024,194 Restricted cash and investments 5,003,450 - - - 5,003,450 3,218,592 Receivables:
Accounts 1,106,211 - - 118,167 1,224,378 1,084,339
Accrued interest 65,331 2,193 6,523 26,141 100,188 5,930 Deposits
Intergovernmental 1,954,920 - - 180,618 2,135,538 1,241,359 Due from other funds (Note 12) 600,791 - - - 600,791 900,977 Inventories - - - 47,545 47,545 47,545
Prepaid costs 41,589 - - - 41,589 136,395
Total Assets $ 30,772,104 $ 1,200,955 $ 6,941,399 $ 11,267,504 $ 50,181,962 $ 43,659,331
LIABILITIES
Accounts payable $ 1,793,533 $ 107,178 $ 234,708 $ 233,948 $ 2,369,367 $ 2,397,334 Accrued liabilities 213,996 - - 45,196 259,192 363,416
Deposits payable 4,318,260 - 15,960 69,226 4,403,446 3,610,384 Due to other funds (Note 12) - - - 68,305 68,305 210,035 Advances from other funds (Note 12) 1,266,061 - - - 1,266,061 1,665,460 Unearned revenues - - - 550,185 550,185 443,331
Total Liabilities 7,591,850 107,178 250,668 966,860 8,916,556 8,689,960
DEFERRED INFLOWS OF RESOURCES
Unavailable revenues - - - - - 215,064
Total Deferred Inflows of Resources - - - - - 215,064
FUND BALANCES
Nonspendable 41,589 - - 47,545 89,134 183,940
Restricted 5,003,450 - 6,690,731 10,269,836 21,964,017 17,970,956 Committed 1,292,880 - - - 1,292,880 1,295,357
Assigned 6,786,980 - - - 6,786,980 6,241,345
Unassigned (Deficit) 10,055,355 1,093,777 - (16,737) 11,132,395 9,062,709 Total Fund Balances 23,180,254 1,093,777 6,690,731 10,300,644 41,265,406 34,754,307 Total Liabilities, Deferred Inflows of
Resources, and Fund Balances $ 30,772,104 $ 1,200,955 $ 6,941,399 $ 11,267,504 $ 50,181,962 $ 43,659,331 Capital Projects Fund Totals
See Accompanying Notes to the Basic Financial Statements. 23 CITY OF SOLANA BEACH, CALIFORNIA
RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF NET POSITION
JUNE 30, 2023
Amounts reported for governmental activities in the Statement of Net Position are different because:
Total Fund Balances - Governmental Funds $ 41,265,406
Capital assets of $117,351,712, net of accumulated depreciation of $75,543,514, used in governmental activities are not financial resources and, therefore, are not reported in the funds. 41,808,198
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 outflows - pension related 7,918,832
Deferred outflows - OPEB related 86,914
Deferred inflows - pension related (1,364,040)
Deferred inflows - OPEB related (428,154)
Total Deferred Outflows and Inflows Related to Postemployment Benefits 6,213,552 Long-term liabilities that are not due and payable in the current period, and therefore, are not reported in the funds.
Bonds payable (5,500,000)
Compensated absences (670,497)
Claims (838,000)
Loans payable (291,010)
Accrued interest payable on long-term debt (605)
Net OPEB liability (2,073,298)
Net pension liability (17,982,962)
Total Long-term Liabilities (27,356,372)
Net Position of Governmental Activities $ 61,930,784
See Accompanying Notes to the Basic Financial Statements. 24 CITY OF SOLANA BEACH, CALIFORNIA
STATEMENT OF REVENUES,
EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2023
(WITH COMPARATIVE TOTALS FOR JUNE 30, 2022)
Other
Sand Governmental
General Replenishment City CIP Funds 2023 2022
REVENUES
Taxes and assessments $ 22,145,018 $ 446,805 $ - $ 2,351,678 $ 24,943,501 $ 22,265,851 Licenses, permits and fees 1,002,304 - - 86,970 1,089,274 773,593 Intergovernmental 56,047 8,465,943 - 2,764,865 11,286,855 3,322,539 Charges for services 890,968 - 264,997 646,173 1,802,138 2,754,210 Use of money and property 643,126 (29,288) 4,717 164,903 783,458 (399,689) Fines and forfeitures 408,220 - - - 408,220 261,932
Other revenues 3,731,586 - 366,516 4,151 4,102,253 3,348,906 Total Revenues 28,877,269 8,917,465 602,225 6,018,740 44,415,699 32,327,342
EXPENDITURES
Current:
General government 7,061,076 - - - 7,061,076 5,598,530
Public safety 11,851,744 - - 857,032 12,708,776 12,043,209 Public works 3,075,754 - 1,517 1,247,126 4,324,397 3,792,133 Community development 1,467,099 - - 157,928 1,625,027 1,347,528 Community services 758,666 - - 85,002 843,668 825,180
Capital outlay 177,735 9,012,336 1,146,827 415,513 10,752,411 1,430,880 Debt service:
Principal retirement - - - 203,808 203,808 199,531
Interest and fiscal charges 46,300 - - 339,136 385,436 346,004 Total Expenditures 24,438,374 9,012,336 1,148,344 3,305,545 37,904,599 25,582,995 Excess (Deficiency) of Revenue
Over (Under) Expenditures 4,438,895 (94,871) (546,119) 2,713,195 6,511,100 6,744,347
OTHER FINANCING SOURCES (USES)
Transfers in (Note 12) 1,991,285 - 2,841,916 259,900 5,093,101 2,992,483 Transfers out (Note 12) (3,431,416) - - (1,661,685) (5,093,101) (2,992,483) Total Other Financing Sources (Uses) (1,440,131) - 2,841,916 (1,401,785) - - Net Change in Fund Balances (94,871) 2,998,764 2,295,797 1,311,410 6,511,100 6,744,347 Fund Balances - Beginning 20,181,490 1,188,648 4,394,934 8,989,234 34,754,306 28,009,960 Fund Balances - Ending $ 23,180,254 $ 1,093,777 $ 6,690,731 $ 10,300,644 $ 41,265,406 $ 34,754,307 Capital Projects Fund Total Governmental Funds
See Accompanying Notes to the Basic Financial Statements. 25 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, 2023
Amounts reported for governmental activities in the Statement of Activities are different because:
Net Change in Fund Balances - Total Governmental Funds $ 6,511,100 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. 7,751,794
Revenues in the Statement of Activities that do not provide current financial resources are not reported as revenues in the funds. (215,062) 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 longterm 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.
Principal paid on long-term liabilities 203,808
Some expenses reported in the Statement of Activities do not require the use of current financial resources and, therefore, are not reported as expenditures in the governmental funds.
Accrued interest on long-term debt (43)
Compensated absences (123,518)
Claims and judgments 260,000
Changes in pension liabilities and related deferred outflows and inflows of resources 2,502,923
Changes in OPEB liabilities and related deferred outflows and inflows of resources 382,204
Total Expenses 3,021,566
Change in Net Position of Governmental Activities $ 17,273,206 See Accompanying Notes to the Basic Financial Statements. 26 PROPRIETARY FUND FINANCIAL STATEMENTS
27 CITY OF SOLANA BEACH, CALIFORNIA
STATEMENT OF NET POSITION
PROPRIETARY FUNDS
JUNE 30, 2023
(WITH COMPARATIVE TOTALS FOR JUNE 30, 2022)
Solana Energy
Sanitation Fund Alliance Fund 2023 2022
ASSETS
Current Assets:
Cash and cash equivalents $ 12,424,542 $ - $ 12,424,542 $ 11,101,231 Receivables:
Accounts 64,789 56,771 121,560 396,693
Interest 30,049 - 30,049 1,792
Intergovernmental 643,976 160,875 804,851 945,353
Total Current Assets 13,163,356 217,646 13,381,002 12,445,069 Noncurrent Assets:
Advances to other funds (Note 12) 1,266,061 - 1,266,061 1,665,460 Investment in joint venture 37,054,566 - 37,054,566 36,460,678 Capital assets not being depreciated (Note 4) 174,526 - 174,526 174,526 Capital assets, net of accumulated depreciation (Note 4) 16,920,258 - 16,920,258 17,359,428 Total Noncurrent Assets 55,415,411 - 55,415,411 55,660,092 Total Assets 68,578,767 217,646 68,796,413 68,105,161
DEFERRED OUTFLOWS OF RESOURCES
Pension related 639,292 - 639,292 189,865
OPEB related 7,016 - 7,016 10,754
Total Deferred Outflows of Resources 646,308 - 646,308 200,619
LIABILITIES
Current Liabilities:
Accounts payable 67,475 180 67,655 112,098
Accrued liabilities 20,697 44,269 64,966 62,761
Compensated absences 36,550 - 36,550 25,591
Accrued interest payable 203,631 - 203,631 210,073
Due to other funds (Note 12) - 532,486 532,486 690,942
Loans and bonds payable - current 565,000 - 565,000 542,500 Total Current Liabilities 893,353 576,935 1,470,288 1,643,965 Noncurrent Liabilities:
Compensated absences 35,130 - 35,130 26,858
Loans and bonds payable 15,129,711 - 15,129,711 15,720,266 Net pension liability 1,451,775 - 1,451,775 468,281
Net OPEB liability 167,379 - 167,379 180,489
Total Noncurrent Liabilities 16,783,995 - 16,783,995 16,395,894 Total Liabilities 17,677,348 576,935 18,254,283 18,039,859
DEFERRED INFLOWS OF RESOURCES
Pension related 110,120 - 110,120 413,073
OPEB related 34,565 - 34,565 56,047
-
Total Deferred Inflows of Resources 144,685 - 144,685 469,120
NET POSITION
Net investment in capital assets 11,547,573 - 11,547,573 11,656,188 Unrestricted (Deficit) 39,855,469 (359,289) 39,496,180 38,140,613 Total Net Position (Deficit) $ 51,403,042 $ (359,289) $ 51,043,753 $ 49,796,801 Total Proprietary Funds
See Accompanying Notes to the Basic Financial Statements. 28 CITY OF SOLANA BEACH, CALIFORNIA
STATEMENT OF REVENUES, EXPENSES
AND CHANGES IN FUND NET POSITION
PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2023
(WITH COMPARATIVE TOTALS FOR JUNE 30, 2022)
Sanitation Fund
Solana Energy
Alliance Fund 2023 2022
OPERATING REVENUES
Charges for services $ 5,846,765 $ 752 $ 5,847,517 $ 5,818,187 Miscellaneous Revenue 111,414 177,216 288,630 365,344
Total Operating Revenues 5,958,179 177,968 6,136,147 6,183,531
OPERATING EXPENSES
Cost of sales and services 2,182,563 16,951 2,199,514 2,220,296 Administration 1,093,580 2,278 1,095,858 933,798
Depreciation 554,480 - 554,480 525,060
Total Operating Expenses 3,830,623 19,229 3,849,852 3,679,154 Operating Income (Loss) 2,127,556 158,739 2,286,295 2,504,377
NONOPERATING REVENUES (EXPENSES)
Interest income 144,964 4,676 149,640 35,005
Interest expense (598,127) - (598,127) (615,256)
Amortization of investment premium - - - 5,100
Gain (loss) on disposal of capital assets - - - (369,845) Share in joint venture net gain/(loss) (590,856) - (590,856) 161,633 Total Nonoperating Revenues (Expenses) (1,044,019) 4,676 (1,039,343) (783,363) Change in Net Position 1,083,537 163,415 1,246,952 1,721,014 Net Position - Beginning (Deficit) 50,319,505 (522,704) 49,796,801 48,075,787 Net Position - Ending (Deficit) $ 51,403,042 $ (359,289) $ 51,043,753 $ 49,796,801 Total Proprietary Funds
See Accompanying Notes to the Basic Financial Statements. 29 CITY OF SOLANA BEACH, CALIFORNIA
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2023
(WITH COMPARATIVE TOTALS FOR JUNE 30, 2022)
Sanitation Fund
Solana Energy
Alliance Fund 2023 2022
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers $ 6,374,406 $ 177,376 $ 6,551,782 $ 7,027,324 Payments to suppliers and service providers (2,220,434) (21,318) (2,241,752) (3,123,995) Payments to employees for salaries and benefits (874,089) (2,278) (876,367) (731,934) Net Cash Provided by (Used for) Operating Activities 3,279,883 153,780 3,433,663 3,171,395
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
Payment to other funds - - - (47,045)
Net Cash Provided by (Used for) Noncapital Financing Activities - - - (47,045)
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Repayment received from capital-related interfund borrowings 399,399 - 399,399 388,596 Advances made for capital-related interfund borrowings - (158,456) (158,456) - Acquisition and construction of capital assets (115,310) - (115,310) (669,803) Principal paid on capital debt (542,500) - (542,500) (530,000) Interest paid on capital debt (630,124) - (630,124) (646,111) Net Cash Provided by (Used for) Capital and Related Financing Activities (888,535) (158,456) (1,046,991) (1,457,318)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest on investments 116,707 4,676 121,383 (308,972) Investment in joint venture (1,184,744) - (1,184,744) (738,352) Net Cash Provided by (Used for) Investing Activities (1,068,037) 4,676 (1,063,361) (1,047,324) Net Increase (Decrease) in Cash and Cash Equivalents 1,323,311 - 1,323,311 619,708 Cash and Cash Equivalents - Beginning 11,101,231 - 11,101,231 10,481,523 Cash and Cash Equivalents - Ending $ 12,424,542 $ - $ 12,424,542 $ 11,101,231 Reconciliation of Operating Income (Loss) to Net Cash Provided by (Used for) Operating Activities:
Operating income (loss) $ 2,127,556 $ 158,739 2,286,295 $ 2,504,377 Adjustments to Reconcile Operating Income (Loss) to
Net Cash Provided by (Used for) Operating Activities:
Depreciation expense 554,480 - 554,480 525,060
(Increase) decrease in accounts receivable 275,725 (592) 275,133 274,196 (Increase) decrease in intergovernmental receivables 140,502 - 140,502 569,597 (Increase) decrease in pension related deferred outflows of resources (449,427) - (449,427) 9,177 (Increase) decrease in OPEB related deferred outflows of resources 3,738 - 3,738 (10,754) Increase (decrease) in accounts payable (40,604) (3,839) (44,443) (584,988) Increase (decrease) in accrued liabilities 2,733 (528) 2,205 2,285 Increase (decrease) in compensated absences 19,231 - 19,231 1,147 Increase (decrease) in net pension liability 983,494 - 983,494 (459,468) Increase (decrease) in net OPEB liability (13,110) - (13,110) (16,807) Increase (decrease) in pension related deferred inflows of resources (302,953) - (302,953) 395,187 Increase (decrease) in OPEB related deferred inflows of resources (21,482) - (21,482) (37,614)
Total Adjustments 1,152,327 (4,959) 1,147,368 667,018
Net Cash Provided by (Used for) Operating Activities $ 3,279,883 $ 153,780 $ 3,433,663 $ 3,171,395 Schedule of Non-Cash Investing, Capital, and Financing Activities:
Amortization of bonds premium/discount $ 25,555 $ - $ 25,555 $ 68,647 Unrealized gain on investment in joint venture - - - 161,633 Total Proprietary Funds
See Accompanying Notes to the Basic Financial Statements. 30 FIDUCIARY FUND FINANCIAL STATEMENTS
31 CITY OF SOLANA BEACH, CALIFORNIA
STATEMENT OF FIDUCIARY NET POSITION
FIDUCIARY FUNDS
JUNE 30, 2023
Pension (and Other
Private-Purpose
Trust Fund Trust Fund
OPEB Successor Agency
Trust Fund of the Former RDA Custodial Funds
ASSETS
Cash and cash equivalents $ - $ 66,170 $ 265,992
Investments:
Money market mutual funds 1,442,775 - 418
Local Agency Investment Fund - - 58,452
Asset-backed securities - - 14,713
Federal agency securities - - 43,965
Medium term corporate notes - - 38,809
Supranational securities - - 3,766
US Treasury securities - - 92,074
Receivables:
Accrued interest - - 1,246
Due from other governments - - 898
Total Assets 1,442,775 66,170 520,333
LIABILITIES
Accounts payable - 1,106 3,721
Accrued liabilities - 809 -
Accrued interest - 5,701 -
Long-term liabilities:
Due in one year (Note 16) - 133,500 -
Due in more than one year (Note 16) - 1,902,400 -
Total Liabilities - 2,043,516 3,721
NET POSITION
Restricted for:
Postemployment benefits other than pensions 1,442,775 - - Individuals, organizations, and other governments - (1,977,346) 516,612 Total Net Position $ 1,442,775 $ (1,977,346) $ 516,612
See Accompanying Notes to the Basic Financial Statements. 32 CITY OF SOLANA BEACH, CALIFORNIA
STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
FIDUCIARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2023
Pension (and Other
Employee Benefit) Private-Purpose
Trust Fund Trust Fund
OPEB Successor Agency
Trust Fund of the Former RDA Custodial Funds
ADDITIONS
Employers contributions $ 137,000 $ - $ -
Investment earnings 106,050 171 5,190
Property taxes - 281,204 -
Special assessment collections - - 234,502
Total Additions 243,050 281,375 239,692
DEDUCTIONS
Administrative expenses - 31,639 -
Contractual services 7,423 - 10,981
Principal expense - - 100,000
Interest expense - 71,316 106,432
Total Deductions 7,423 102,955 217,413
Net Increase (Decrease) in Fiduciary Net Position 235,627 178,420 22,279 Net Position (Deficit) - Beginning 1,207,148 (2,155,766) 494,333 Net Position (Deficit) - Ending $ 1,442,775 $ (1,977,346) $ 516,612 See Accompanying Notes to the Basic Financial Statements. 33 NOTES TO THE BASIC
FINANCIAL STATEMENTS
34 THIS PAGE INTENTIONALLY LEFT BLANK
35 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
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 (“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.
36 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO THE BASIC FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2023
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. 37 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO THE BASIC FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2023
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.
Sand Replenishment Fund – accounts for sand replenishment, sand retention, and coastal improvement projects.
City CIP 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. 38 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO THE BASIC FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2023
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 costs of providing clean energy services to the general public on a continuing basis be financed or recovered primarily though user charges.
Fiduciary Fund Financial Statements
Fiduciary fund financial statements include a Statement of Fiduciary Net Position and a Statement of Changes in Fiduciary Net Position. The City’s fiduciary funds include custodial funds, one pension (and other employee benefits) trust fund, and one privatepurpose 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 Pension (and Other Employee Benefit) Trust fund is used to report resources held in trust for retirees and beneficiaries covered by the City.
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. 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.
39 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO THE BASIC FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2023
Note 1: Summary of Significant Accounting Policies (Continued) c. Cash, Cash Equivalents, and Investments (Continued)
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 and to changes 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. Fair Value Measurement
Certain assets and liabilities are required to be reported at fair value. The fair value framework provides a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of fair value hierarchy are described as follows:
Level 1 - Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets.
Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly and fair value is determined through the use of models or other valuation methodologies including:
Quoted prices for similar assets or liabilities in active markets; Quoted prices for identical or similar assets or liabilities in markets that are inactive; Inputs other than quoted prices that are observable for the asset or liability; Inputs that are derived principally from or corroborated by observable market data by correlation or other means.
Level 3 - Inputs to the valuation methodology are unobservable and significant to the fair value measurement. These unobservable inputs reflect the City’s own assumptions about the inputs market participants would use in pricing the asset or liability (including assumptions about risk). These unobservable inputs are developed based on the best information available in the circumstances and may include the City’s own data. 40 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO THE BASIC FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2023
Note 1: Summary of Significant Accounting Policies (Continued) f. 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:
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.
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
Buildings and improvements 20-50 years
Equipment 3-25 years
Vehicles 5-10 years
Infrastructure - sewer lines 40-50 years
Infrastructure - other 20-60 years
41 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO THE BASIC FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2023
Note 1: Summary of Significant Accounting Policies (Continued) g. 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 assets 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 two items that qualify for reporting in this category. These 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.
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 asset 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. h. 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. 42 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO THE BASIC FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2023
Note 1: Summary of Significant Accounting Policies (Continued) i. 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.
j. 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.
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, 2021
Measurement Date June 30, 2022
Measurement Period July 1, 2021 to June 30, 2022
k. 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. 43 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO THE BASIC FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2023
Note 1: Summary of Significant Accounting Policies (Continued) k. Other Post-Employment Benefits (OPEB) (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, 2021
Measurement Date June 30, 2023
Measurement Period July 1, 2022 to June 30, 2023
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 five years and all other amounts being recognized over the expected average remaining service lifetime (EARSL) of
7.2 years at June 30, 2023.
l. 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. m. 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.
44 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO THE BASIC FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2023
Note 1: Summary of Significant Accounting Policies (Continued) n. 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.
o. 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.
45 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO THE BASIC FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2023
Note 1: Summary of Significant Accounting Policies (Continued) o. Fund Balance Flow Assumptions (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.
p. 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 assessed values no more than 2% per year. The City receives a share of this basic levy. q. 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.
r. Comparative Data
Selected information regarding the prior year has been included in the accompanying financial statements. This information has been included for comparison purposes only and does not represent a complete presentation in accordance with generally accepted accounting principles. Accordingly, such information should be read in conjunction with the government’s prior year financial statements, from which this selected financial data was derived.
46 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO THE BASIC FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2023
Note 2: Stewardship, Compliance, and Accountability
a. Excess of Expenditures over Appropriations
On June 30, 2023, the Sand Replenishment/Retention and Coastal Access capital projects fund, the COPS special revenue fund, and the CDBG special revenue fund reported expenditures exceeding appropriations in the amount of $6,897,856, $65,511, and $308, respectively.
b. Deficit Fund Equity
At June 30, 2023, the following nonmajor fund reported deficit fund balance:
This deficit is due to the timing of reimbursements and revenues for these activities and is expected to be eliminated through future revenues.
c. Budgetary Compliance
The Assessment Districts CIP capital projects fund and Boating and Waterways fund did not adopt a budget for the fiscal year ended June 30, 2023.
Note 3: Cash and Investments
The following is a summary of pooled cash and investments and restricted cash and investments at June 30, 2023:
Nonmajor Fund Name Classification Deficit
CDBG Special Revenue Fund $ 16,737
Fiduciary
Funds
Governmental Business-Type Statement of
Activities Activities Net Position Total
Cash and investments $ 41,028,483 $ 12,424,542 $ 332,162 $ 53,785,187 Restricted cash and investments 5,003,450 - 1,694,972 6,698,422 Total $ 46,031,933 $ 12,424,542 $ 2,027,134 $ 60,483,609 Government-Wide Statement of
Net Position
47 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO THE BASIC FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2023
Note 3: Cash and Investments (Continued)
Cash and investments consisted of the following at June 30, 2023:
a. Cash Deposits
The carrying amounts of the City’s cash deposits were $4,921,376 at June 30, 2023.
Bank balances were $5,351,850 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 $430,474 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 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, 2023, 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.
Cash:
Cash on hand $ 400
Demand deposits 4,921,376
Total cash 4,921,776
Investments:
Local Agency Investment Fund 18,456,311
Investments 30,661,420
Cash and investments held in PARS Section 115 Trust 6,444,102 Total investments 55,561,833
Total cash and investments $ 60,483,609
48 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO THE BASIC FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2023
Note 3: Cash and Investments (Continued)
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.
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. *Maximum *Maximum
Authorized by Maximum Percentage of Investment in
Investment Types Authorized by State Law Investment Policy Maturity Portfolio One Issuer Local agency bonds Yes 5 years 30% 5%
U.S. Treasury bills Yes 5 years None None
U.S. Treasury notes Yes 5 years None None
State obligations - CA and others Yes 5 years 30% 5%
California local agency obligations Yes 5 years 30% 5%
U.S. agency securities Yes 5 years None None
Banker's acceptances Yes 180 days 40% 5%
Commercial paper Yes 270 days 25% 10%
Non-Negotiable certificates of deposit Yes 5 years 20% None Negotiable certificates of deposit Yes 5 years 30% 5%
Certificate of Deposit Placement Services Yes 5 years 30% None Collateralized Bank Deposits Yes N/A None None
Repurchase agreements Yes 1 year None None
Medium-term notes Yes 5 years 30% 5%
Mutual and money market funds Yes N/A 20% 10%
Mortgage pass-through and asset-backed securities Yes 5 years 20% 5% Asset backed security Yes 5 years 20% 5%
County pooled investment funds Yes N/A None None
Joint powers authority pool Yes N/A None None
Supranational Yes 5 years 30% 10%
Local Agency Investment Fund (LAIF) Yes N/A None None
* Based on state law or investment policy requirements, whichever is more restrictive. 49 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO THE BASIC FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2023
Note 3: Cash and Investments (Continued)
b. 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 180 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.
50 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
Note 3: Cash and Investments (Continued)
d. Risk Disclosures (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 creditworthy. 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, 2023, for each investment type.
12 Months 13 to 24 25 to 60
Fair Value or Less Months Months
Local Agency Investment Fund $ 18,456,311 $ 18,456,311 $ - $ - U.S. Treasury 14,571,526 2,820,528 9,440,782 2,310,216
U.S. Government Agency Securities:
Federal Home Loan Bank 1,570,219 - 376,013 1,194,206
Federal Farm Credit Bank 2,185,305 917,765 674,534 593,006 Federal National Mortgage Association 1,429,992 975,017 454,975 - Federal Home Loan Mortgage Corporation 1,772,133 1,772,133 - - Medium-term Notes 6,141,720 2,118,848 3,392,201 630,671 Money Market Mutual Funds 66,060 66,060 - -
Supranationals 596,066 186,231 409,835 -
Asset Backed Securities 2,328,398 2,176 1,120,075 1,206,147 Investments Held in Section 115 Trust:
Equity Mutual Fund 2,745,693 2,745,693 - -
Fixed Income Mutual Fund 2,726,043 2,726,043 - -
Cash/Money Market 972,367 972,367 - -
$ 55,561,833 $ 33,759,172 $ 15,868,415 $ 5,934,246
Investments
Remaining Investment Maturities
Total as of Minimum
June 30, 2023 Legal Rating AAA AA+/Aa1 Not Rated
Local Agency Investment Fund $ 18,456,311 N/A - $ $ - $ 18,456,311 U.S. Treasury * 14,571,526 N/A - - 14,571,526
U.S. Government Agency Securities:
Federal Home Loan Bank 1,570,219 N/A 1,570,219 - -
Federal Farm Credit Bank 2,185,305 N/A 2,185,305 - -
Federal National Mortgage Association 1,429,992 N/A 1,429,992 - - Federal Home Loan Mortgage Corporation 1, 772,133 N/A 1,772,133 - - Medium-term Notes 6,141,720 A 232,922 5,908,798 -
Money Market Mutual Funds 66,060 AAA 66,060 - -
Supranationals 596,066 AA 596,066 - -
Asset Backed Securities 2,328,398 AA 2,328,398 - -
Investments Held in Section 115 Trust:
Equity Mutual Fund 2,745,693 AA 2,745,693 - -
Fixed Income Mutual Fund 2,726,043 AA 2,726,043 - -
Money Market 972,367 AA 972,367 - -
$ 55,561,833 $ 16,625,198 $ 5,908,798 $ 33,027,837
* Exempt from rating disclosure
Investments
51 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO THE BASIC FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2023
Note 3: Cash and Investments (Continued)
d. Risk Disclosures (Continued)
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 no investments in the following US Government Agency issuers which held more than 5% of the investment portfolio.
e. Fair Value Hierarchy
The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The following table represents the fair value measurements of investments recognized in the accompanying Statement of Net Position measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fall at June 30, 2023:
Level 1 Level 2 Uncategorized Total
Local Agency Investment Fund $ - $ - $ 18,456,311 $ 18,456,311 U.S. Treasury 14,571,526 - - 14,571,526
U.S. Government Agency Securities - 6,957,649 - 6,957,649 Medium-term Notes - 6,141,720 - 6,141,720
Supranationals - 596,066 - 596,066
Asset Backed Securities - 2,328,398 - 2,328,398
Equity Mutual Fund 2,745,693 - - 2,745,693
Fixed Income Mutual Fund 2,726,043 - - 2,726,043
Money Market 1,038,427 - - 1,038,427
Total $ 21,081,689 $ 16,023,833 $ 18,456,311 $ 55,561,833 52 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO THE BASIC FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2023
Note 4: Capital Assets
The following is a summary of changes in capital assets for governmental activities for the year ended June 30, 2023:
Governmental activities depreciation expense for capital assets for the year ended June 30, 2023, is as follows:
Balance Balance
June 30, 2022 Additions Deletions June 30. 2023
Governmental Activities
Non-Depreciable Assets:
Land $ 5,337,440 $ - $ - $ 5,337,440
Construction in progress 2,095,207 9,924,038 (1,236,797) 10,782,448 Total non-depreciable assets 7,432,647 9,924,038 (1,236,797) 16,119,888 Depreciable Assets:
Buildings 6,016,915 - 2,013 6,014,902
Improvements 14,238,363 - 52,197 14,186,166
Equipment 3,243,402 38,208 355,617 2,925,993
Vehicles 2,559,556 17,000 216,812 2,359,744
Infrastructure 74,425,269 1,363,414 43,664 75,745,019
Total depreciable assets 100,483,505 1,418,622 670,303 101,231,824 Less Accumulated Depreciation:
Buildings (3,361,860) (120,790) (3,481,107) (1,543)
Improvements (6,608,020) (482,188) (48,735) (7,041,473) Equipment (2,588,942) (236,348) (2,472,193) (353,097)
Vehicles (1,994,200) (145,445) (1,938,800) (200,845)
Infrastructure (59,306,726) (1,342,148) (38,933) (60,609,941) Total accumulated depreciation (73,859,748) (2,326,919) (643,153) (75,543,514) Total depreciable assets, net 26,623,757 (908,297) 27,150 25,688,310 Total capital assets, net $ 34,056,404 $ 9,015,741 $ (1,209,647) $ 41,808,198 General Government $ 253,282
Public Safety 247,149
Public Works 1,390,234
Community Development 5,926
Community Services 430,328
Total Depreciation Expense $ 2,326,919
53 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
Note 4: Capital Assets (Continued)
The following is a summary of changes in capital assets for business-type activities for the year ended June 30, 2023:
Business-type activities depreciation expense for capital assets for the year ended June 30, 2023, is $554,480, recorded in the Sanitation Fund.
Note 5: 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 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.
Balance Balance
June 30, 2022 Additions Deletions June 30. 2023
Business-Type Activities
Non-Depreciable Assets:
Land $ 111,706 $ - $ - $ 111,706
Construction in progress 62,820 115,310 (115,310) 62,820 Total non-depreciable assets 174,526 115,310 (115,310) 174,526 Depreciable Assets:
Buildings 6,766,498 - - 6,766,498
Improvements 18,516,952 115,310 - 18,632,262
Equipment 828,705 - - 828,705
-
Total depreciable assets 26,112,155 115,310 - 26,227,465 Less Accumulated Depreciation:
Buildings and improvements (8,172,006) (537,948) - (8,709,954) Equipment (580,721) (16,532) - (597,253)
Total accumulated depreciation (8,752,727) (554,480) - (9,307,207) Total depreciable assets, net 17,359,428 (439,170) - 16,920,258 Total capital assets, net $ 17,533,954 $ (323,860) $ (115,310) $ 17,094,784 54 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
Note 5: City Employees Retirement Plan - Pension Plans (Continued) Benefits Provided
CalPERS provides service retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full-time employment. Members with five years of total service are eligible to retire at age 50 with statutorily reduced benefits. All members are eligible for non-duty disability benefits after ten 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, 2023, for which the City has contracted:
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, 2023, the contributions recognized as a reduction to the net pension liability was $1,938,134.
Miscellaneous Miscellaneous Safety Fire Safety Fire Safety Fire Safety Lifeguard Safety Lifeguard PEPRA Other Major Benefit Options Miscellaneous* Second Tier PEPRA First Tier* Second Tier PEPRA First Tier* Second Tier* Safety Prior to January 1, 2010 On or after Prior to January 1, 2010 On or after Prior to January 1, 2010 On or after Hire Date January 1, 2010 but prior to January 1, 2013 January 1, 2010 but prior to January 1, 2013 January 1, 2010 but prior to January 1, 2013 January 1, 2013 January 1, 2013 January 1, 2013
Benefit Provision 2.5% @ 55 2.0% @ 60 2.% @ 62 3.0% @ 50 2.0% @ 50 2.7% @ 57 3.0% @ 50 2.0% @ 50 2.7% @ 57 Benefit Formula
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 Years Service 5 Years Service 5 Years Service 5 Years Service 5 Years Service 5 Years Service 5 Years Service 5 Years Service 5 Years Service Benefit Payments Monthly for Life Monthly for Life Monthly for Life Monthly for Life 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
. Percentage of 1.426% to 1.092% to
Eligible Compensation 2.418% 2.418% 1.0% to 2.5% 3.0% 2.0% to 2.7% 2.0% to 2.7% 1.423% to 2.0% 1.423% to 2.0% 2.0% to 2.7% Required Employer
Contribution Rates 12.21% 8.63% 7.47% 23.75% 18.17% 12.78% 23.75% 18.17% 12.78% Required Employee
Contribution Rates 7.96% 6.93% 6.75% 8.99% 8.95% 13.00% 8.99% 8.95% 13.00% * Closed to new member entrants.
55 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
Note 5: 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, 2023, the City of Solana Beach reported net pension liabilities for its proportionate shares of the net pension liability of each Plan as follows:
The net pension liability of each of the Plans is measured as of June 30, 2022, 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, 2021 rolled forward to June 30, 2022 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, 2021 and 2022, respectively, was as follows:
For the year ended June 30, 2023, the City recognized pension expense as follows:
Proportionate Share of
Net Pension Liability
Miscellaneous $ 7,283,498
Safety 12,151,239
Total $ 19,434,737
Miscellaneous Safety Combined
Proportion - June 30, 2022 0.18924% 0.19550% 0.19330%
Proportion - June 30, 2023 0.15566% 0.17683% 0.16825%
Change -0.03358% -0.01867% -0.02505%
Miscellaneous Safety Total Plans
$ 31,950 $ (108,428) $ (76,478)
56 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
Note 5: City Employees Retirement Plan - Pension Plans (Continued) At June 30, 2023, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:
The $2,195,332 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 fiscal year ended June 30, 2024. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:
Deferred Outflows Deferred Inflows
of Resources of Resources
Pension contributions subsequent to measurement date $ 886,210 $ - Changes of assumptions 746,347 -
Difference between expected and actual experience 146,267 97,963 Net difference between projected and actual earnings on plan investments 1,334,143 -
Differences between actual contributions and the
proportionate share of contributions - 297,773
Change in employer's proportion 38,943 148,988
Total Miscellaneous Plan 3,151,910 544,724
Safety Plan
Pension contributions subsequent to measurement date 1,309,122 - Changes in assumptions 1,225,213 -
Difference between expected and actual experience 502,896 131,953 Net difference between projected and actual earnings on plan investments 1,918,850 -
Differences between actual contributions and the
proportionate share of contributions - 797,483
Change in employer's proportion 450,133 -
Total Safety Plan 5,406,214 929,436
Total All Plans $ 8,558,124 $ 1,474,160
Miscellaneous Plan
Fiscal
Year Ended Miscellaneous Safety
June 30, Plan Plan Total
2024 $ 389,482 $ 891,489 $ 1,280,971
2025 332,162 706,374 1,038,536
2026 183,324 399,271 582,595
2027 816,008 1,170,522 1,986,530
$ 1,720,976 $ 3,167,656 $ 4,888,632
Deferred Outflows/(Inflows) of Resources
57 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO THE BASIC FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2023
Note 5: City Employees Retirement Plan - Pension Plans (Continued) c. Actuarial Methods and Assumptions
Actuarial Assumptions
For the measurement period ended June 30, 2022 (the measurement date), the total pension liability was determined by rolling forward the June 30, 2021 total pension liability.
The June 30, 2021, total pension liabilities were based on the following actuarial methods and assumptions:
Discount Rate
The discount rate used to measure the total pension liability was 6.90%. 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.
Actuarial Cost Method Entry Age Normal Cost Method
Actuarial Assumptions:
Discount Rate 6.90%
Inflation 2.30%
Salary Increases Varies by entry age and service
Mortality Rate Table (1) Derived using CalPERS Membership Data for all funds
Post Retirement Benefit Contract COLA up to 2.30% until Purchasing Increase Power Protection Allowance Floor on
Purchasing Power applies
(1) The mortality table used was developed based on CalPERS specific data.
The probabilities of mortality are based on the 2021 CalPERS Experience Study for the period from 2001 to 2019. Pre-retirement and post-retirement mortality rates include generational mortality improvement using 80% of Scale MP-2020 published by the Society of Actuaries. For more details on this table, please published by the Society of Actuaries. For more details on this table, please refer to the CalPERS Experience Study and Review of Actuarial Assumptions report from November 2021 that can be found on the CalPERS website. 58 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO THE BASIC FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2023
Note 5: City Employees Retirement Plan - Pension Plans (Continued) In determining the long-term expected rate of return, CalPERS took into account both short-term and long-term market return expectations as well as the expected pension fund cash flows. Using historical returns of all of the funds’ asset classes, expected compound (geometric) returns were calculated over the next 20 years using a building-block approach. The expected rate of return was then adjusted to account for assumed administrative expenses of 10 Basis points.
The expected real rates of return by asset class are as followed:
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 (5.90 percent) or 1% point higher (7.90 percent) than the current rate:
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.
Assumed Asset
Asset Class1Allocation Real Return1,2
Global Equity - Cap-weighted 30.00% 4.45%
Global Equity - Non-Cap-weighted 12.00 3.84
Private Equity 13.00 7.28
Treasury 5.00 0.27
Mortgage-backed Securities 5.00 0.50
Investment Grade Corporates 10.00 1.56
High Yield 5.00 2.27
Emerging Market Debt 5.00 2.48
Private Debt 5.00 3.57
Real Assets 15.00 3.21
Leverage (5.00) (0.59)
1 An expected inflation of 2.30% used for this period.
2 Figures are based on the 2021-22 Asset Liability Management Study.
Discount Rate - 1% Current Discount Rate Discount Rate + 1% Plan Type 5.90% 6.90% 7.90%
Miscellaneous $ 10,979,736 $ 7,283,498 $ 4,242,411
Safety 17,608,873 12,151,239 7,690,856
Total $ 28,588,609 $ 19,434,737 $ 11,933,267
59 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO THE BASIC FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2023
Note 6: 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 ($151 per month for 2023) 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.
b. Plan Membership
At June 30, 2023, the measurement date, the following numbers of participants were covered by the benefit terms:
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 $398,228 during the 2023 fiscal year which consisted of $181,055 of pay-as-you-go benefit payments, $137,000 in contributions to the trust, $763 in non-trust administration expenses, and $79,410 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
Inactive plan members or beneficiaries currently receiving benefit payments 51 Inactive plan members entitled to but not yet receiving benefit payments 13 Active plan members 67
131
June 30, 2023 June 30, 2022
Total OPEB Liability (TOL) $ 3,674,391 $ 3,620,210
Fiduciary Net Position (FNP) 1,433,714 1,204,021
Net OPEB Liability (NOL) $ 2,240,677 $ 2,416,189
Funded Status (FNP/TOL) 39.0% 33.3%
Fiscal Year Ending
60 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO THE BASIC FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2023
Note 6: Other Post-Employment Benefits (Continued)
The City’s net OPEB liability was measured as of June 30, 2023, and the total OPEB liability used to calculate the net OPEB liability was determined by an actuarial valuation dated June 30, 2021 that was rolled forward to determine the June 30, 2023 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, 2023, using the following actuarial assumptions, applied to all periods included in the measurement, unless otherwise specified:
Actuarial Valuation Date: June 30, 2021
Contribution Policy: City contributes at least the full ADC Discount Rate and Long-Term Expected Rate of Return on Assets: 5.50% at June 30, 2023; Expected City contributions projected to keep sufficient plan assets to pay all benefits from trust
General Inflation: 2.50% annually
Mortality, Retirement, Disability, Termination: CalPERS 1997-2015 Experience Study Mortality Improvement: Mortality projected fully generational with Scale MP-2020 Salary Increases: Aggregate – 2.75% annually; Merit – CalPERS 1997-2015 Experience Study
Medical Trend: Non-Medicare – 6.50% for 2023, decreasing to an ultimate rate of 3.75% in 2076; Medicare (Non-Kaiser) – 5.65% for 2023, decreasing to an ultimate rate of 3.75% in 2076
PEMHCA Minimum Increases: 3.75% 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%
61 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO THE BASIC FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2023
Note 6: Other Post-Employment Benefits (Continued)
e. Changes in the OPEB Liability
f. 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:
g. 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 well 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:
Total OPEB Fiduciary Net Net OPEB
Liability Position Liability
Balance at June 30, 2022 3,620,210$ $ 1,204,021 $ 2,416,189 Changes for the year:
Service cost 116,300 - 116,300
Interest 198,346 - 198,346
Assumption changes - - -
Actual vs. expected experience - - -
Contributions - employer - 398,228 (398,228)
Net investment income - 95,935 (95,935)
Benefit payments* (260,465) (260,465) -
Administrative expenses - (4,005) 4,005
Net changes 54,181 229,693 (175,512)
Balance at June 30, 2023 3,674,391$ $ 1,433,714 $ 2,240,677 *Benefit payments include an implied subsidy of $79,410 for the measurement date June 30, 2023. 1% Decrease Current Rate 1% Increase
(4.50%) (5.50%) (6.50%)
Net OPEB Liability $ 2,706,387 $ 2,240,677 $ 1,857,616
1% Decrease Current Trend 1% Increase
Net OPEB Liability $ 1,920,043 $ 2,240,677 $ 2,703,439
62 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO THE BASIC FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2023
Note 6: Other Post-Employment Benefits (Continued)
h. 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.
i. OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB For the fiscal year ended June 30, 2023, the City recognized OPEB income of $14,830. As of fiscal year ended June 30, 2023, the City reported deferred outflows of resources related to OPEB from the following sources:
Amounts reported as deferred outflows of resources related to OPEB will be recognized as expense as follows:
Deferred Outflows Deferred Inflows
of Resources of Resources
Differences between expected and
actual experience $ - $ 49,696
Changes in assumptions 8,549 413,023
Net difference between projected and
actual earnings on plan investments 85,381 -
Total $ 93,930 $ 462,719
Fiscal Year Ended Outflows/(Inflows)
June 30, of Resources
2024 $ (235,701)
2025 (101,491)
2026 (16,760)
2027 (9,552)
2028 (4,406)
Thereafter (879)
Total $ (368,789)
63 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO THE BASIC FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2023
Note 7: 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
The following material construction commitments existed at June 30, 2023:
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 1 st of April and 1st of October.
Note 8: 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.
Remaining
Project Name Contract Amount
Sewer and Storm Drain Rehab $ 649,634
Pavement Maintenance Project 1,088,838
64 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO THE BASIC FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2023
Note 8: Risk Management (Continued)
The workers’ compensation and general liability claims payable of $838,000 reported at June 30, 2023, 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:
The City also maintains insurance coverage in the following specific areas: real and personal property damage, special events, cyber liability, pollution, and master crime.
Note 9: Long-Term Liabilities
a. Changes in Long-term Liabilities
The following is a summary of changes in long-term debt for the year ended June 30, 2023:
Beginning of Current Year Claims Balance at
Fiscal Year and Changes in Claim Fiscal Year
Liability Estimates Payments End
2021 - 2022 $ 1,177,000 $ (190,933) 111,933 $ 1,098,000 $ 2022 - 2023 1,098,000 (138,925) (121,075) 838,000
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 $ - Total Bonds Payable 5,500,000 - - 5,500,000 -
Direct Borrowings and Direct Placements
Lease Revenue Bonds - ABAG 145,000 - 145,000 - -
Discount (577) - (577) - -
Total Direct Borrowings and Direct Placements 144,423 - 144,423 - - Loan Payable 349,819 - 58,809 291,010 60,855
Compensated Absences 546,979 522,030 398,512 670,497 488,503 Claims (Note 8) 1,098,000 - 260,000 838,000 198,434
Total Governmental Activities $ 7,639,221 $ 522,030 $ 861,744 $ 7,299,507 $ 747,792 Business-Type Activities:
Bonds Payable
2017 Wastewater Revenue Refunding Bonds $ 5,520,000 $ - $ 305,000 $ 5,215,000 $ 320,000 Premium 357,766 - 25,555 332,211 -
Total Bonds Payable 5,877,766 - 330,555 5,547,211 320,000 Direct Borrowings and Direct Placements
San Elijo JPA Loan Payable - 2017 10,385,000 - 237,500 10,147,500 245,000 Total Direct Borrowings and Direct Placements 10,385,000 - 237,500 10,147,500 245,000 Compensated Absences 52,449 45,975 26,744 71,680 36,550 Total Business-Type Activities $ 16,315,215 $ 45,975 $ 594,799 $ 15,766,391 $ 601,550 65 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO THE BASIC FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2023
Note 9: Long-Term Liabilities (Continued)
b. Governmental Activities
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, 2023, is $5,500,000.
The future principal and interest payments as of June 30, 2023, were as follows:
Loan Payable
Energy Efficiency/Conservation Upgrades
On May 9, 2012, the City entered into a loan financing agreement with Municipal Finance Corporation for various energy efficiency/conservation upgrades at City facilities. The loan was executed in the amount of $818,696. 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, 2023, the balance of the loan liability was $291,010.
Year Ending June 30, Principal Interest
2024 $ - $ 325,105
2025 - 325,105
2026 - 325,105
2027 - 325,105
2028 - 325,105
2029 - 2033 - 1,625,525
2034 - 2038 - 1,625,525
2039 - 2043 2,491,824 1,305,244
2044 - 2048 3,008,176 502,413
Total $ 5,500,000 $ 6,684,232
Bonds Payable
66 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO THE BASIC FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2023
Note 9: Long-Term Liabilities (Continued)
b. Governmental Activities (Continued)
The future principal and interest payments as of June 30, 2023, were as follows:
c. Business Type Activities
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, 2023, is $5,215,000.
The future principal and interest payments as of June 30, 2023, were as follows:
Year Ending June 30, Total
2024 $ 70,374
2025 70,374
2026 70,374
2027 70,374
2028 35,187
Total minimum payments 316,683
Less: amount representing interest (25,673)
Present value of minimum payments $ 291,010
Year Ending June 30, Principal Interest
2024 $ 320,000 $ 186,806
2025 330,000 174,006
2026 340,000 164,106
2027 350,000 153,906
2028 370,000 136,406
2029 - 2033 2,080,000 437,924
2034 - 2038 1,425,000 89,106
Total $ 5,215,000 $ 1,342,260
Bonds Payable
67 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO THE BASIC FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2023
Note 9: Long-Term Liabilities (Continued)
c. Business Type Activities (Continued)
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, 2023, is $10,147,500.
The future principal and interest payments as of June 30, 2023, were as follows:
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.
Year Ending June 30, Principal Interest
2024 $ 245,000 $ 424,088
2025 255,000 414,288
2026 267,500 401,538
2027 280,000 388,163
2028 295,000 374,163
2029 - 2033 1,707,500 1,634,440
2034 - 2038 2,125,000 1,220,402
2039 - 2043 2,545,000 795,157
2044 - 2047 2,427,500 247,400
Total $ 10,147,500 $ 5,899,639
Direct Borrowings
68 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO THE BASIC FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2023
Note 10: 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
2017 Wastewater
JPA Loan Bonds
Revenues:
Operating revenues $ 5,847,517 $ 5,847,517
Other operating 177,216 177,216
Non-operating 261,054 261,054
Gross revenues 6,285,787 6,285,787
Expenses 3,971,483 3,971,483
Net Income 2,314,304 2,314,304
Add Back:
Interest expense 598,127 598,127
Depreciation 554,480 554,480
Loss on disposal of capital assets 53,371 53,371
Net Revenues Available for Debt Service $ 3,520,282 3,520,282 (2011 and 2017 JPA Loans)
2017 Refunding Revenue Bonds Debt Service:
Principal repayment 237,500 237,500
Interest charges 423,213 423,213
Total debt service $ 660,713 660,713
Net Revenues Available for Debt Service $ 2,859,569
(2017 Wastewater Bonds)
2017 Wastewater Revenue Refunding Bonds Debt Service:
Principal repayment $ 305,000
Interest charges 199,006
Total debt service $ 504,006
Coverage Ratio 5.3 5.7
69 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO THE BASIC FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2023
Note 11: 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
Sand Governmental Governmental
General Replenishment City CIP Funds Funds
Nonspendable:
Inventories $ - $ - $ - $ 47,545 $ 47,545
Prepaid Costs 41,589 - - - 41,589
Total Nonspendable 41,589 - - 47,545 89,134
Restricted:
Section 115 Pension Stabilization Trust 5,003,450 - - - 5,003,450 TransNet - - - 386,935 386,935
Gas Tax - - - 672,674 672,674
Municipal Improvement Districts - - - 1,262,782 1,262,782 Lighting District - - - 3,519,441 3,519,441
COPS - - - 346,115 346,115
Public Safety - - - 711,199 711,199
Fire Mitigation - - - 64,871 64,871
Coastal Area Business/Visitor Assistance & Enhancement - - - 1,159,661 1,159,661 Miscellaneous Grants - - - 88,296 88,296
Boating & Waterways - - - 3,967 3,967
Housing - - - 1,394,849 1,394,849
Camp Programs - - - 38,306 38,306
SB1 Streets & Roads - - - 520,973 520,973
Capital Projects - - 6,690,731 73,882 6,764,613
Debt Service - - - 25,885 25,885
Total Restricted 5,003,450 - 6,690,731 10,269,836 21,964,017 Committed:
Parks & Recreation 37,057 - - - 37,057
Public Facilities 924,228 - - - 924,228
Public Art 26,728 - - - 26,728
In-Lieu Housing 100,786 - - - 100,786
Other Post-Employment Benefits 204,081 - - - 204,081
Total Committed 1,292,880 - - - 1,292,880
Assigned:
Housing 1,499,500 - - - 1,499,500
Community TV 87,740 - - - 87,740
Street Sweeping 134,706 - - - 134,706
Park Fees 44,518 - - - 44,518
Asset Replacement 3,364,430 - - - 3,364,430
Self-Insurance 203,597 - - - 203,597
Workers' Compensation 719,394 - - - 719,394
Public Facilities 733,095 - - - 733,095
Total Assigned 6,786,980 - - - 6,786,980
Unassigned 10,055,355 1,093,777 - (16,737) 11,132,395
Total Fund Balance $ 23,180,254 $ 1,093,777 $ 6,690,731 $ 10,300,644 $ 41,265,406 Classification
70 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO THE BASIC FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2023
Note 11: Classification of Fund Balances (Continued)
a. Net investment in capital assets
The detail of net investment in capital assets for the year ended June 30, 2023 is as follows:
Note 12: Interfund Transactions
a. Due From and To Other Funds
At June 30, 2023, the City had the following short-term interfund receivables and payables:
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. b. Interfund Transfers
For the year ended June 30, 2023, the City had the following transfers:
Due to Other Funds Due From Other Funds
Governmental Funds:
General Fund $ - $ 600,791
CDBG 68,305 -
Enterprise Fund:
Solana Energy Alliance 532,486 -
Total $ 600,791 $ 600,791
Business-Type
Activities
Governmental Sanitation
Activities Fund
Capital assets, net of
accumulated depreciation $ 41,808,198 $ 17,094,784
Less:
Bonds, notes and finance
purchase agreements (5,791,010) (5,215,000)
Capital related, non-debt payable (1,339,447) -
Add:
Unamortized premiums/(discounts) - (332,211)
Net investment in capital assets $ 34,677,741 $ 11,547,573 Non-Major
General City CIP Governmental
Transfers Out Fund Fund Funds Totals
General Fund $ 329,600 $ 2,841,916 $ 259,900 $ 3,431,416 Non-Major Governmental Funds 1,661,685 - - 1,661,685
Total $ 1,991,285 $ 2,841,916 $ 259,900 $ 5,093,101
Transfers In
71 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2023
Note 12: Interfund Transactions (Continued)
Transfers were made from the General Fund and the Lighting District, Miscellaneous Grants nonmajor special revenue fund to the City Debt Service nonmajor debt service fund to provide resources for debt service payments. Transfer was also made to the City CIP fund for the purposes of funding capital projects. During the fiscal year ended June 30, 2023, 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 will be as follows:
Year Ending June 30, Principal Interest Total
2024 $ 410,503 $ 35,196 $ 445,699
2025 421,914 23,785 445,699
2026 433,644 12,055 445,699
Total $ 1,266,061 $ 71,036 $ 1,337,097
72 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2023
Note 13: 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, 2023, is as follows:
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, 2023, is as follows:
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.
Operating revenues $ 9,979,094
Operating expenses (11,718,136)
Net non-operating income 557,332
Capital contributions 2,369,487
Change in net position $ 1,187,777
Total assets and deferred outflows of resources $ 118,743,966 Total liabilities and deferred inflows of resources (44,634,834) Net position - total fund equity $ 74,109,132
Investment at June 30, 2022 $ 36,460,678
Capital contribution 1,184,744
Current year share in the joint venture net income (loss) (590,856) Investment at June 30, 2023 $ 37,054,566
73 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2023
Note 14: 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, 2023, were $1,665,000. 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, 2023, were $370,000.
74 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2023
Note 15: 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. a. 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, 2023, follows:
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.
Balance Balance Due Within
June 30, 2022 Additions Deletions June 30, 2023 One Year Fiduciary Funds:
2017 Tax Allocation
Refunding Bonds $ 2,165,000 $ - $ 129,100 $ 2,035,900 $ 133,500 75 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2023
Note 15: Successor Agency Trust for Assets of Former Redevelopment Agency (Continued) The annual debt service requirements are as follows:
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 $2,490,072 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 $281,203 and the debt service obligation on the bonds was $200,777. b. 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 9.
Year Ending June 30, Principal Interest Total
2024 $ 133,500 $ 67,302 $ 200,802
2025 138,200 62,778 200,978
2026 142,700 38,098 180,798
2027 147,700 53,263 200,963
2028 152,500 48,260 200,760
2029 - 2033 844,300 160,163 1,004,463
2034 - 2036 477,000 24,308 501,308
Total $ 2,035,900 $ 454,172 $ 2,490,072
76 REQUIRED SUPPLEMENTARY INFORMATION
77 CITY OF SOLANA BEACH, CALIFORNIA
BUDGETARY COMPARISON SCHEDULE
GENERAL FUND
FOR THE YEAR ENDED JUNE 30, 2023
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 20,181,490 $ 20,181,490 $ 20,181,490 $ - Resources (Inflows):
Taxes:
Property 9,417,000 9,497,000 10,414,854 917,854
Transient occupancy 1,375,000 1,525,000 2,234,028 709,028 Sales 3,560,300 4,130,300 5,845,967 1,715,667
Franchise and other 3,401,400 3,551,400 3,650,169 98,769 Licenses and permits 453,000 640,500 1,002,304 361,804
Intergovernmental 289,500 289,500 56,047 (233,453)
Charges for services 791,000 868,500 890,968 22,468
Use of money and property 383,000 358,000 643,126 285,126 Fines and forfeitures 381,500 206,500 408,220 201,720
Other revenues 2,064,100 2,185,640 3,731,586 1,545,946
Amounts Available for Appropriations 42,297,290 43,433,830 49,058,759 5,624,929 Charges to Appropriations (Outflows):
General Government:
City Council 351,455 371,455 368,811 2,644
City Clerk 574,030 621,625 542,702 78,923
Legal Services 479,310 529,315 529,242 73
City Manager 540,945 596,230 490,738 105,492
Finance 1,388,105 2,885,190 2,853,887 31,303
Personnel 413,055 424,870 358,609 66,261
Information Systems 417,110 623,300 596,118 27,182
Support Services 1,263,590 1,474,083 1,320,969 153,114
Total General Government 5,427,600 7,526,068 7,061,076 464,992 Public Safety:
Marine safety 1,019,990 1,246,985 1,177,052 69,933
Law enforcement 4,900,005 4,853,469 4,775,585 77,884
Code & parking enforcement 273,580 310,805 310,302 503
Fire department 5,441,775 5,227,180 5,321,204 (94,024)
Animal regulation 95,000 95,000 94,761 239
Civil defense 169,800 169,800 167,052 2,748
Total Public Safety 11,900,150 11,903,239 11,845,956 57,283 Public Works:
Street and other 2,139,130 2,497,448 2,179,506 317,942
Engineering 462,410 784,636 782,294 2,342
Public Facilities 101,500 101,500 113,954 (12,454)
Total Public Works 2,703,040 3,383,584 3,075,754 307,830 Community Development:
Planning 804,115 860,085 800,639 59,446
Building services 449,715 690,865 666,460 24,405
Total Community Development 1,253,830 1,550,950 1,467,099 83,851 Community Services:
Community services 124,665 186,685 166,679 20,006
Recreation programs 643,870 656,425 591,987 64,438
Total Community Services 768,535 843,110 758,666 84,444 Capital Outlay 71,900 303,283 177,735 125,548
Interest Expense 46,300 46,300 46,300 -
Total Charges to Appropriations 22,171,355 25,556,534 24,432,586 1,123,948 Other Financing Sources (Uses):
Transfers in 941,285 1,991,285 1,991,285 -
Transfers out (507,500) (3,431,416) (3,431,416) -
Total Other Financing Sources (Uses) 433,785 (1,440,131) (1,440,131) - Budgetary Fund Balance, June 30 $ 20,559,720 $ 16,437,165 $ 23,186,042 $ 6,748,877 Budget Amounts
See Accompanying Notes to the Required Supplementary Information. 78 CITY OF SOLANA BEACH, CALIFORNIA
SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY
MISCELLANEOUS EMPLOYEES PENSION PLAN
LAST TEN FISCAL YEARS
JUNE 30, 2023
Measurement Date 2022 2021 2020 2019 2018
City of Solana Beach's Proportion
of the Net Pension Liability 0.15566% 0.06644% 0.05654% 0.05532% 0.05550% City of Solana Beach's Proportionate
Share of the Net Pension Liability $ 7,283,498 $ 3,593,385 $ 6,151,557 $ 5,668,839 $ 5,177,151 City of Solana Beach's Miscellaneous
Employees Plan Covered Payroll $ 3,483,076 $ 3,353,666 $ 3,312,829 $ 3,058,602 $ 2,879,582 City of Solana Beach's Proportionate
Share of the Net Pension Liability as a
Percentage of the Miscellaneous
Employees Plan Covered Payroll 209.11% 107.15% 185.69% 185.34% 179.79% Plan Fiduciary Net Position as a
Percentage of the Total Pension Liability 73.14% 88.29% 75.10% 75.26% 75.26% Measurement Date 2017 2016 2015 2014
City of Solana Beach's Proportion
of the Net Pension Liability 0.05313% 0.05241% 0.05706% 0.04245% City of Solana Beach's Proportionate
Share of the Net Pension Liability $ 5,268,836 $ 4,534,940 $ 3,550,604 $ 2,651,591 City of Solana Beach's Miscellaneous
Employees Plan Covered Payroll $ 2,721,499 $ 2,593,359 $ 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 193.60% 174.87% 147.34% 105.34% Plan Fiduciary Net Position as a
Percentage of the Total Pension Liability 72.59% 75.87% 79.82% 78.40% See Accompanying Notes to the Required Supplementary Information. 79 CITY OF SOLANA BEACH, CALIFORNIA
SCHEDULE OF EMPLOYER'S CONTRIBUTIONS
MISCELLANEOUS EMPLOYEES PENSION PLAN
LAST TEN FISCAL YEARS
JUNE 30, 2023
Fiscal Year 2023 2022 2021 2020 2019
Actuarially Determined Contribution $ 886,210 $ 768,847 $ 685,457 $ 636,152 $ 541,582 Contribution in Relation to the Actuarially
Determined Contribution 886,210 768,847 685,457 636,152 541,582 Contribution Excess (Deficiency) $ - $ - $ - $ - $ -
City of Solana Beach's Miscellaneous
Employees Plan Covered Payroll $ 4,807,042 $ 3,483,076 $ 3,353,666 $ 3,312,829 $ 3,058,602 Plan Fiduciary Net Position as a
Percentage of the Total Pension Liability 18.44% 22.07% 20.44% 19.20% 17.71% Fiscal Year 2018 2017 2016 2015
Actuarially Determined Contribution $ 460,816 $ 417,318 $ 385,634 $ 330,415 Contribution in Relation to the Actuarially
Determined Contribution 460,816 417,318 385,634 330,415 Contribution Excess (Deficiency) $ - $ - $ - $ -
City of Solana Beach's Miscellaneous
Employees Plan Covered Payroll $ 2,879,582 $ 2,721,499 $ 2,593,359 $ 2,409,776 Plan Fiduciary Net Position as a
Percentage of the Total Pension Liability 16.00% 15.33% 14.87% 13.71% See Accompanying Notes to the Required Supplementary Information. 80 CITY OF SOLANA BEACH, CALIFORNIA
SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY
SAFETY EMPLOYEES PENSION PLAN
LAST TEN FISCAL YEARS
JUNE 30, 2023
Measurement Date 2022 2021 2020 2019 2018
City of Solana Beach's Proportion
of the Net Pension Liability 0.17683% 0.12686% 0.09655% 0.09380% 0.09361% City of Solana Beach's Proportionate
Share of the Net Pension Liability $ 12,151,239 $ 6,861,102 $ 10,505,198 $ 9,611,934 $ 8,884,523 City of Solana Beach's Miscellaneous
Employees Plan Covered Payroll $ 2,258,877 $ 2,138,322 $ 2,389,544 $ 2,270,208 $ 2,249,144 City of Solana Beach's Proportionate
Share of the Net Pension Liability as a
Percentage of the Miscellaneous
Employees Plan Covered Payroll 537.93% 320.86% 439.63% 423.39% 395.02% Plan Fiduciary Net Position as a
Percentage of the Total Pension Liability 69.25% 88.29% 75.10% 75.26% 75.26% Measurement Date 2017 2016 2015 2014
City of Solana Beach's Proportion
of the Net Pension Liability 0.08816% 0.08774% 0.09490% 0.07208% City of Solana Beach's Proportionate
Share of the Net Pension Liability $ 8,742,997 $ 7,592,101 $ 5,905,301 $ 4,940,589 City of Solana Beach's Miscellaneous
Employees Plan Covered Payroll $ 2,115,191 $ 2,116,065 $ 1,997,991 $ 1,925,616 City of Solana Beach's Proportionate
Share of the Net Pension Liability as a
Percentage of the Miscellaneous
Employees Plan Covered Payroll 413.34% 358.78% 295.56% 256.57% Plan Fiduciary Net Position as a
Percentage of the Total Pension Liability 72.59% 75.87% 79.82% 78.40% See Accompanying Notes to the Required Supplementary Information. 81 CITY OF SOLANA BEACH, CALIFORNIA
SCHEDULE OF EMPLOYER'S CONTRIBUTIONS
SAFETY EMPLOYEES PENSION PLAN
LAST TEN FISCAL YEARS
JUNE 30, 2023
Fiscal Year 2023 2022 2021 2020 2019
Actuarially Determined Contribution $ 1,309,122 $ 1,169,287 $ 1,045,632 $ 988,753 $ 838,065 Contribution in Relation to the Actuarially
Determined Contribution 1,309,122 1,169,287 1,045,632 988,753 838,065 Contribution Excess (Deficiency) $ - $ - $ - $ - $ -
City of Solana Beach's Miscellaneous
Employees Plan Covered Payroll $ 3,640,252 $ 2,258,877 $ 2,138,322 $ 2,389,544 $ 2,270,208 Plan Fiduciary Net Position as a
Percentage of the Total Pension Liability 35.96% 51.76% 48.90% 41.38% 36.92% Fiscal Year 2018 2017 2016 2015
Actuarially Determined Contribution $ 717,659 $ 673,212 $ 619,022 $ 519,933 Contribution in Relation to the Actuarially
Determined Contribution 717,659 673,212 619,022 519,933 Contribution Excess (Deficiency) $ - $ - $ - $ -
City of Solana Beach's Miscellaneous
Employees Plan Covered Payroll $ 2,249,144 $ 2,115,191 $ 2,116,065 $ 1,997,991 Plan Fiduciary Net Position as a
Percentage of the Total Pension Liability 31.91% 31.83% 29.25% 26.02% See Accompanying Notes to the Required Supplementary Information. 82 CITY OF SOLANA BEACH, CALIFORNIA
SCHEDULE OF CHANGES IN NET OPEB LIABILITY AND RELATED RATIOS
RETIREE HEALTHCARE PLAN
LAST TEN FISCAL YEARS
JUNE 30, 2023
2023 2022 2021 2020 2019 2018 2017
TOTAL OPEB LIABILITY
Service cost $ 116,300 $ 118,609 $ 115,154 $ 140,334 $ 218,793 $ 231,577 $ 225,000 Interest 198,346 214,173 210,592 231,171 187,559 172,035 164,000 Actual vs. expected experience (43,558) - (42,558) - - - - Assumption changes - 11,837 - (384,986) (1,145,939) (242,883) - Benefit payments (260,465) (263,592) (275,453) (248,040) (230,041) (219,042) (147,532) Net Changes 54,181 37,469 50,293 (304,079) (58,313) (969,628) 241,468 Total OPEB Liability - Beginning 3,620,210 3,582,741 3,532,448 3,836,527 4,806,155 4,864,468 4,623,000 Total OPEB Liability - Ending (a) $ 3,674,391 $ 3,620,210 $ 3,582,741 $ 3,532,448 $ 3,836,527 $ 4,806,155 $ 4,864,468
PLAN FIDUCIARY NET POSITION
Contributions - employer $ 398,228 $ 402,299 $ 480,132 $ 446,751 $ 484,191 $ 307,582 $ 233,000 Net investment income 95,935 (189,608) 210,366 20,418 27,769 23,652 17,000 Benefit payments (260,465) (263,592) (275,453) (248,040) (227,210) (219,042) (148,000) Administrative expenses (4,005) (3,959) (3,382) (4,056) (2,496) (2,062) - Other changes - - (1,390) - - - 151
Net Changes (54,860) 229,693 410,273 215,073 282,254 110,130 102,151 Plan Fiduciary Net Position - Beginning 1,204,021 1,258,881 848,608 633,535 351,281 241,151 139,000 Plan Fiduciary Net Position - Ending (b) $ 1,433,714 $ 1,204,021 $ 1,258,881 $ 848,608 $ 633,535 $ 351,281 $ 241,151 PLAN NET OPEB LIABILITY - ENDING (a) - (b) $ 2,240,677 $ 2,416,189 $ 2,323,860 $ 2,683,840 $ 3,202,992 $ 4,454,874 $ 4,623,317 Retiree Healthcare Plan Fiduciary Net Position
as a Percentage of the Plan Total OPEB Liability 39.02% 33.26% 35.14% 24.02% 16.51% 7.31% 4.96% City of Solana Beach's Retiree Healthcare Plan
Covered-Employee Payroll $ 7,935,037 $ 7,671,497 $ 7,533,033 $ 7,506,736 $ 7,050,741 $ 6,666,082 $ 6,406,137 City of Solana Beach's Net Retiree Healthcare
Plan OPEB Liability as a Percentage of Retiree
Healthcare Plan Covered-Employee Payroll 28.24% 31.50% 30.85% 35.75% 45.43% 66.83% 72.17% See Accompanying Notes to the Required Supplementary Information. 83 CITY OF SOLANA BEACH, CALIFORNIA
SCHEDULE OF EMPLOYER CONTRIBUTIONS
RETIREE HEALTHCARE PLAN
LAST TEN FISCAL YEARS
JUNE 30, 2023
2023 2022 2021 2020 2019
Retiree Healthcare Plan Actuarially Determined Contribution $ 321,907 $ 318,390 $ 389,000 $ 378,000 $ 484,191 Retiree Healthcare Plan Contributions in Relation to the Actuarially Determined Contribution 398,228 402,299 480,132 446,751 484,191 Contribution Excess (Deficiency) $ 76,321 $ 83,909 $ 91,132 $ 68,751 $ - Retiree Healthcare Plan Covered-Employee Payroll $ 7,935,037 $ 7,671,497 $ 7,533,033 $ 7,506,736 $ 7,050,741 Plan Fiduciary Net Position as a
Percentage of the Total Pension Liability 5.02% 5.24% 6.37% 5.95% 6.87% 2018 2017
Actuarially Determined Contribution $ 220,491 $ 531,000 Contribution in Relation to the Actuarially
Determined Contribution 252,055 233,000
Contribution Excess (Deficiency) $ 31,564 $ (298,000)
City of Solana Beach's Miscellaneous
Employees Plan Covered Payroll $ 6,666,082 $ 6,406,137
Plan Fiduciary Net Position as a
Percentage of the Total Pension Liability 3.31% 3.64%
See Accompanying Notes to the Required Supplementary Information. 84 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION
JUNE 30, 2023
Note 1: Budgetary Information
The City is required by its municipal code to adopt an annual budget on or before June 30 for the ensuring fiscal year. The budget is adopted on a basis consistent with accounting principles generally accepted in the United States of America. From the effective date of the budget adoption, the amounts budgeted become the “annual appropriated budget.” The annual appropriated budget is adopted for the General Fund, special revenue funds, capital projects funds and debt service funds.
The City Council may amend the budget by motion during the fiscal year. The appropriations constitute the budget for the 2022-2023 fiscal year and the City Manager is authorized to transfer monies between accounts within a department, provided that the total budget for the department is not exceeded. Transfer of monies from one department of the City to another, or from one fund to another, shall be approved by the City Council. However, any revisions that alter total expenditures of any fund must be approved by the City Council.
Expenditures may not legally exceed appropriations at the fund level. Appropriations lapse at the end of the fiscal year. Selected appropriations are carried over. Project-length financial plans are adopted for the City capital projects. Supplemental appropriations, which increase appropriations, may be made during the fiscal year.
Note 2: Miscellaneous and Safety Employees’ Pension Plans
1. The schedules are intended to show information for ten years. Historical information is required only for years for which GASB Statement No. 68 is applicable; fiscal year 2014-15 was the first year of implementation. Additional years will be displayed as they become available.
2. Assumption Changes:
a. For Fiscal Year 2022-23: None
b. Effective with the June 30, 2021 valuation date (2022 measurement date), the accounting discount rate was reduced from 7.15% to 6.90%. In determining the longterm expected rate of return, CalPERS took into account long-term market return expectations as well as the expected pension fund cash flows. Projected returns for all asset classes are estimated, combined with risk estimates, and are used to project compound (geometric) returns over the long term. The discount rate used to discount liabilities was informed by the long-term projected portfolio return. In addition, demographic assumptions and the inflation rate assumption were changed in accordance with the 2021 CalPERS Experience Study and Review of Actuarial Assumptions.
c. For Fiscal Year 2021-22: None
d. For Fiscal Year 2020-21: None
e. For Fiscal Year 2019-20: None
f. For Fiscal Year 2018-19: The CalPERS Board adopted new mortality assumptions.
The new mortality table was developed from the December 2017 Experience Study.
The inflation assumption was reduced from 2.75% to 2.50%. The assumption for salary increases and overall payroll growth was reduced from 3.00% to 2.75%. g. For Fiscal Year 2017-18: The discount rate was reduced from 7.65% to 7.15%. h. For Fiscal Year 2016-17: None
i. For Fiscal Year 2015-16: The discount rate was increased from 7.50% to 7.65% j. For Fiscal Year 2014-15: None
3. There were no changes of benefit terms.
85 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION (CONTINUED) JUNE 30, 2023
Note 2: Miscellaneous and Safety Employees’ Pension Plans (continued)
4. Methods and assumptions used to determine contribution rates for the most recent year include:
a. Valuation Date: June 30, 2020
b. Actuarial Cost Method: Entry Age Normal Cost Method
c. Amortization Method: Level Percent of Pay, Direct Rate Smoothing d. Remaining Amortization Periods: Differs by Employer Rate Plan but not more than 28 Years
e. Asset Valuation Method: Fair value of assets
f. Inflation: 2.50%
g. Salary Increases: Varies by Entry Age and Service
h. Discount Rate: 7.00% (net of administrative expenses) i. Mortality: Derived using CalPERS’ Membership Data for all Funds. The post-retirement mortality rates include 15 years of projected ongoing mortality improvement using 90% of Scale MP-2016 published by the Society of Actuaries. j.
Note 3: Retiree Healthcare Plan Other Post-Employment Benefits Plan
1. The schedules are intended to show information for ten years. Historical information is required only for years for which GASB Statement Nos. 74 and 75 are applicable; fiscal year 2016-17 was the first year of implementation. Additional years will be displayed as they become available.
2. There were no changes of benefit terms.
3. Methods and assumptions used to determine contribution rates for the most recent year include:
a. Actuarial Valuation Date: June 30, 2021
b. Contribution Policy: City contributes at least the full ADC c. Discount Rate and Long-Term Expected Rate of Return on Assets: 5.50% at d. June 30, 2023; 5.50% at June 30, 2022; Expected City contributions projected to keep sufficient plan assets to pay all benefits from trust e. General Inflation: 2.50% annually
f. Mortality, Retirement, Disability, Termination: CalPERS 1997-2015 Experience Study
g. Mortality improvement: Mortality projected fully generational with Scale MP-2020. h. The schedules are intended to show information for ten years. Historical information is required only for years for which GASB Statement Nos. 74 and 75 are applicable; fiscal year 2016-17 was the first year of implementation. Additional years will be displayed as they become available.
i. Salary Increases: Aggregate -2.75% annually
j. Medical Trend: Non-Medicare – 6.50% for 2023, decreasing to an ultimate rate of
3.75% in 2076; Medicare (Non-Kaiser)– 5.65% for 2023, decreasing to an ultimate rate of 3.75% in 2076; Medicare (Kaiser) – 4.60% for 2023, decreasing to an ultimate rate of 3.75% in 2076.
k. PEMHCA Minimum Increases: 3.75% annually
l. Cap Increases: 0%
m. 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%
n. Changes of Assumptions: None
o. Changes of benefit terms: None
86 SUPPLEMENTARY INFORMATION
87 NON-MAJOR GOVERNMENTAL FUNDS
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.
Transnet Fund – accounts for revenues received and expenditures related to transportation development, transit, and related studies. Funding is provided to the City as a secondary recipient under an agreement with the County of San Diego and with San Diego Associations of Governments.
Municipal Improvement Districts Fund - accounts for receipts and expenditures related to landscape maintenance within the various improvement districts. The assessments are collected via the County tax roll.
Lighting District Fund - accounts for the revenues received and expenditures related to streetlights on the City's streets. The City determines the yearly budget, and property owners are charged their proportionate share on a per-unit basis. The assessments are collected via the County tax roll.
COPS Fund - accounts for federal and state grants received for police services.
Public Safety Fund - accounts for federal and state grants received for public safety.
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.
CDBG Fund - accounts for the revenues and expenditures of the Community Development Block Grant program.
Coastal Area Business/Visitor Assistance and Enhancement Fund - accounts 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.
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.
Miscellaneous Grants Fund - accounts for grants received to fund various ongoing capital projects.
Developer Pass-Thru Fund - accounts for resources reserved to developer deposits.
Housing Fund - accounts for resources reserved to provide for low- and moderate-income housing.
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.
Assessment Districts CIP Fund - accounts for capital projects in the assessment districts.
City Debt Service Fund - accounts for debt service in the City. 88 CITY OF SOLANA BEACH, CALIFORNIA
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
JUNE 30, 2023
TransNet
ASSETS
Cash and investments $ 690,653 $ 386,189 $ 1,335,722
Receivables:
Accounts - - -
Interest 1,906 746 3,472
Intergovernmental 29,131 - 7,960
Inventories - - -
Total Assets $ 721,690 $ 386,935 $ 1,347,154
LIABILITIES
Accounts payable $ 49,016 $ - $ 83,752
Accrued liabilities - - 620
Unearned revenues - - -
Deposits payable - - -
Due to other funds - - -
Total Liabilities 49,016 - 84,372
FUND BALANCES
Nonspendable - - -
Restricted 672,674 386,935 1,262,782
Unassigned (Deficit) - - -
Total Fund Balances (Deficit) 672,674 386,935 1,262,782 Total Liabilities, Deferred Inflows
of Resources and Fund Balances (Deficit) $ 721,690 $ 386,935 $ 1,347,154 Special Revenue Funds
Gas Tax
Municipal
Improvement
Districts
89 CITY OF SOLANA BEACH, CALIFORNIA
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
JUNE 30, 2023
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
FUND BALANCES
Nonspendable
Restricted
Unassigned (Deficit)
Total Fund Balances (Deficit)
Total Liabilities, Deferred Inflows
of Resources and Fund Balances (Deficit)
(continued)
$ 3,526,564 $ 361,255 $ 639,117
- - 90,513
8,827 1,046 -
7,623 - -
- - -
$ 3,543,014 $ 362,301 $ 729,630
$ 19,127 $ 16,186 $ 17,924
4,446 - 507
- - -
- - -
- - -
23,573 16,186 18,431
- - -
3,519,441 346,115 711,199
- - -
3,519,441 346,115 711,199
$ 3,543,014 $ 362,301 $ 729,630
Public Safety
Special Revenue Funds
COPS
Lighting
District
90 CITY OF SOLANA BEACH, CALIFORNIA
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
JUNE 30, 2023
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
FUND BALANCES
Nonspendable
Restricted
Unassigned (Deficit)
Total Fund Balances (Deficit)
Total Liabilities, Deferred Inflows
of Resources and Fund Balances (Deficit)
(continued)
$ 64,871 $ - $ 1,157,207
- - -
- - 2,454
- 85,468 -
- - -
$ 64,871 $ 85,468 $ 1,159,661
$ - $ 33,900 $ -
- - -
- - -
- - -
- 68,305 -
- 102,205 -
- - -
64,871 - 1,159,661
- (16,737) -
64,871 (16,737) 1,159,661
$ 64,871 $ 85,468 $ 1,159,661
Coastal Area
Business /
Visitor
Assistance &
CDBG Enhancement
Special Revenue Funds
Fire Mitigation
91 CITY OF SOLANA BEACH, CALIFORNIA
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
JUNE 30, 2023
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
FUND BALANCES
Nonspendable
Restricted
Unassigned (Deficit)
Total Fund Balances (Deficit)
Total Liabilities, Deferred Inflows
of Resources and Fund Balances (Deficit)
(continued)
$ 3,967 $ 163,060 $ 474,943
- - -
- 3,228 -
- - -
- - -
$ 3,967 $ 166,288 $ 474,943
$ - $ - $ 2,750
- - -
- 77,992 472,193
- - -
- - -
- 77,992 474,943
- - -
3,967 88,296 -
- - -
3,967 88,296 -
$ 3,967 $ 166,288 $ 474,943
Developer
Pass-Thru
Special Revenue Funds
Miscellaneous
Grants
Boating &
Waterways
92 CITY OF SOLANA BEACH, CALIFORNIA
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
JUNE 30, 2023
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
FUND BALANCES
Nonspendable
Restricted
Unassigned (Deficit)
Total Fund Balances (Deficit)
Total Liabilities, Deferred Inflows
of Resources and Fund Balances (Deficit)
(continued)
$ 1,391,466 $ 55,693 $ 469,458
- 27,654 -
3,383 - 1,079
- - 50,436
- 47,545 -
$ 1,394,849 $ 130,892 $ 520,973
$ - $ 5,418 $ -
- 39,623 -
- - -
- - -
- - -
- 45,041 -
- 47,545 -
1,394,849 38,306 520,973
- - -
1,394,849 85,851 520,973
$ 1,394,849 $ 130,892 $ 520,973
Special Revenue Funds
SB 1 Streets &
Roads
Camp
Housing Programs
93 CITY OF SOLANA BEACH, CALIFORNIA
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
JUNE 30, 2023
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
FUND BALANCES
Nonspendable
Restricted
Unassigned (Deficit)
Total Fund Balances (Deficit)
Total Liabilities, Deferred Inflows
of Resources and Fund Balances (Deficit)
(continued)
Capital
Project Fund
Debt Service
Fund
Total
$ 148,983 $ 25,885 $ 10,895,033
- - 118,167
- - 26,141
- - 180,618
- - 47,545
$ 148,983 $ 25,885 $ 11,267,504
$ 5,875 $ - $ 233,948
- - 45,196
- - 550,185
69,226 - 69,226
- - 68,305
75,101 - 966,860
- - 47,545
73,882 25,885 10,269,836
- - (16,737)
73,882 25,885 10,300,644
$ 148,983 $ 25,885 $ 11,267,504
City Debt
Service
Assessment
Districts CIP
94 CITY OF SOLANA BEACH, CALIFORNIA
COMBINING STATEMENT OF REVENUES,
EXPENDITURES AND
CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2023
Municipal
Improvement
Gas Tax TransNet Districts
REVENUES
Taxes and assessments $ 334,336 $ - $ 774,580
License and permits - 86,970 -
Intergovernmental - 484,676 2,663
Charges for services - - -
Use of money and property 4,346 (1,042) 15,725
Other revenues - - -
Total Revenues 338,682 570,604 792,968
EXPENDITURES
Current:
Public safety - - -
Public works 429 29,786 791,551
Community development - - -
Community services - - -
Capital outlay 219,985 - -
Debt service:
Principal retirement - - -
Interest and fiscal charges - 325,105 -
Total Expenditures 220,414 354,891 791,551
Excess (Deficiency) of Revenue
Over (Under) Expenditures 118,268 215,713 1,417
OTHER FINANCING SOURCES (USES)
Transfers in - - -
Transfers out - - -
Total Other Financing Sources (Uses) - - -
Net Change in Fund Balance 118,268 215,713 1,417
Fund Balances (Deficit):
Fund Balance - Beginning 554,406 171,222 1,261,365
Fund Balance - Ending $ 672,674 $ 386,935 $ 1,262,782
Special Revenue Funds
95 CITY OF SOLANA BEACH, CALIFORNIA
COMBINING STATEMENT OF REVENUES,
EXPENDITURES AND
CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2023
REVENUES
Taxes and assessments
License and permits
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 Balances (Deficit):
Fund Balance - Beginning
Fund Balance - Ending
(continued)
Lighting
District COPS Public Safety
$ 731,530 $ - $ -
- - -
3,163 165,271 286,934
- - -
32,543 3,564 8,896
- - -
767,236 168,835 295,830
- 165,511 191,198
402,121 - -
- - -
- - -
- - -
- - -
- - -
402,121 165,511 191,198
365,115 3,324 104,632
- - -
(70,400) - -
(70,400) - -
294,715 3,324 104,632
3,224,726 342,791 606,567
$ 3,519,441 $ 346,115 $ 711,199
Special Revenue Funds
96 CITY OF SOLANA BEACH, CALIFORNIA
COMBINING STATEMENT OF REVENUES,
EXPENDITURES AND
CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2023
REVENUES
Taxes and assessments
License and permits
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 Balances (Deficit):
Fund Balance - Beginning
Fund Balance - Ending
(continued)
Coastal Area
Business/Visitor
Fire Assistance &
Mitigation CDBG Enhancement
$ - $ - $ 223,403
- - -
- 137,476 -
16,384 - -
- - 7,062
- - 4,151
16,384 137,476 234,616
7,566 31,150 -
- - -
- - 75,888
- - -
- 106,634 -
- - -
- - -
7,566 137,784 75,888
8,818 (308) 158,728
- - -
- - -
- - -
8,818 (308) 158,728
56,053 (16,429) 1,000,933
$ 64,871 $ (16,737) $ 1,159,661
Special Revenue Funds
97 CITY OF SOLANA BEACH, CALIFORNIA
COMBINING STATEMENT OF REVENUES,
EXPENDITURES AND
CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2023
REVENUES
Taxes and assessments
License and permits
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 Balances (Deficit):
Fund Balance - Beginning
Fund Balance - Ending
(continued)
Boating & Miscellaneous Developer
Waterways Grants Pass-Thru
$ - $ - $ -
- - -
168,125 1,516,557 -
- - 81,274
- 16,079 -
- - -
168,125 1,532,636 81,274
- 5,000 -
- 23,239 -
- - 81,187
- - -
- 62,338 -
- - -
- - -
- 90,577 81,187
168,125 1,442,059 87
- - -
- (1,591,285) -
- (1,591,285) -
168,125 (149,226) 87
(164,158) 237,522 (87)
$ 3,967 $ 88,296 $ -
Special Revenue Funds
98 CITY OF SOLANA BEACH, CALIFORNIA
COMBINING STATEMENT OF REVENUES,
EXPENDITURES AND
CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2023
REVENUES
Taxes and assessments
License and permits
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 Balances (Deficit):
Fund Balance - Beginning
Fund Balance - Ending
(continued)
Camp SB1 Streets
Housing Programs & Roads
$ - $ - $ 287,829
- - -
- - -
- 548,515 -
7,325 - 2,874
- - -
7,325 548,515 290,703
- 456,703 -
- - -
853 - -
- 85,002 -
- - 37,229
- - -
- - -
853 541,705 37,229
6,472 6,810 253,474
- - -
- - -
- - -
6,472 6,810 253,474
1,388,377 79,041 267,499
$ 1,394,849 $ 85,851 $ 520,973
Special Revenue Funds
99 CITY OF SOLANA BEACH, CALIFORNIA
COMBINING STATEMENT OF REVENUES,
EXPENDITURES AND
CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2023
REVENUES
Taxes and assessments
License and permits
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 Balances (Deficit):
Fund Balance - Beginning
Fund Balance - Ending
(continued)
Capital
Project Fund
Debt Service
Fund
Assessment City Debt
Districts CIP Service Total
$ - $ - $ 2,351,678
- - 86,970
- - 2,764,865
- - 646,173
67,531 - 164,903
10,769 - 14,920
78,300 - 6,029,509
- - 857,128
- - 1,247,126
- - 157,928
- - 85,002
- - 426,186
- 203,808 203,808
- 14,031 339,136
- 217,839 3,316,314
78,300 (217,839) 2,713,195
42,000 217,900 259,900
- - (1,661,685)
42,000 217,900 (1,401,785)
120,300 61 1,311,410
(46,418) 25,824 8,989,234
$ 73,882 $ 25,885 $ 10,300,644
100
CITY OF SOLANA BEACH, CALIFORNIA
BUDGETARY COMPARISON SCHEDULE
GAS TAX FUND
FOR THE YEAR ENDED JUNE 30, 2023
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 554,406 $ 554,406 $ -$ 554,406 Resources (Inflows):
Taxes and assessments 373,850 387,850 334,336 (53,514)
Use of money and property 2,000 2,000 4,346 2,346
Amounts Available for Appropriations 930,256 944,256 893,088 (51,168) Charges to Appropriations (Outflows):
Current:
Public works 3,000 151,480 429 151,051
Capital outlay 220,000 464,482 219,985 244,497
Total Charges to Appropriations 223,000 615,962 220,414 395,548 Budgetary Fund Balance, June 30 $ 707,256 $ 328,295 $ 672,674 $ 344,380 Budget Amounts
101
CITY OF SOLANA BEACH, CALIFORNIA
BUDGETARY COMPARISON SCHEDULE
TRANSNET FUND
FOR THE YEAR ENDED JUNE 30, 2023
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 171,222 $ 171,222 $ 171,222 $ - Resources (Inflows):
Taxes:
Service fees 7,800 90,000 86,970 (3,030)
Intergovernmental 250,000 790,105 484,676 (305,429)
Use of money and property 1,500 1,500 (1,042) (2,542)
Amounts Available for Appropriations 430,522 1,052,827 741,826 (311,001) Charges to Appropriations (Outflows):
Public works - 44,980 29,786 15,194
Capital Outlay 250,000 487,348 - 487,348
Debt service:
Interest and fiscal charges - 325,105 325,105 -
Total Charges to Appropriations 250,000 857,433 354,891 502,542 Budgetary Fund Balance, June 30 $ 180,522 $ 195,394 $ 386,935 $ 191,541 Budget Amounts
102
CITY OF SOLANA BEACH, CALIFORNIA
BUDGETARY COMPARISON SCHEDULE
MUNICIPAL IMPROVEMENT DISTRICTS FUND
FOR THE YEAR ENDED JUNE 30, 2023
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 1,261,365 $ 1,261,365 $ 1,261,365 $ - Resources (Inflows):
Taxes and assessments 680,300 680,300 774,580 94,280
Intergovernmental 2,500 2,500 2,663 163
Use of money and property 16,050 16,050 15,725 (325)
Amounts Available for Appropriations 1,960,215 1,960,215 2,054,333 94,118 Charges to Appropriations (Outflows):
Current:
Public works 680,290 884,158 791,551 92,607
Total Charges to Appropriations 680,290 884,158 791,551 92,607 Budgetary Fund Balance, June 30 $ 1,279,925 $ 1,076,057 $ 1,262,782 $ 186,725 Budget Amounts
103
CITY OF SOLANA BEACH, CALIFORNIA
BUDGETARY COMPARISON SCHEDULE
LIGHTING DISTRICT FUND
FOR THE YEAR ENDED JUNE 30, 2023
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 3,224,726 $ 3,224,726 $ 3,224,726 $ - Resources (Inflows):
Taxes and assessments 619,100 621,100 731,530 110,430
Intergovernmental 3,200 3,200 3,163 (37)
Use of money and property 40,500 40,500 32,543 (7,957)
Amounts Available for Appropriations 3,887,526 3,889,526 3,991,962 102,436 Charges to Appropriations (Outflows):
Current:
Public works 406,680 422,250 402,121 20,129
Transfers out 70,400 70,400 70,400 -
Total Charges to Appropriations 477,080 492,650 472,521 20,129 Budgetary Fund Balance, June 30 $ 3,410,446 $ 3,396,876 $ 3,519,441 $ 122,565 Budget Amounts
104
CITY OF SOLANA BEACH, CALIFORNIA
BUDGETARY COMPARISON SCHEDULE
COPS FUND
FOR THE YEAR ENDED JUNE 30, 2023
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 342,791 $ 342,791 $ 342,791 $ - Resources (Inflows):
Intergovernmental 100,000 165,272 165,271 (1)
Use of money and property 3,000 3,000 3,564 564
Amounts Available for Appropriations 445,791 511,063 511,626 563 Charges to Appropriations (Outflows):
Current:
Public safety 150,000 100,000 165,511 (65,511)
Total Charges to Appropriations 150,000 100,000 165,511 (65,511) Budgetary Fund Balance, June 30 $ 295,791 $ 411,063 $ 346,115 $ (64,948) Budget Amounts
105
CITY OF SOLANA BEACH, CALIFORNIA
BUDGETARY COMPARISON SCHEDULE
PUBLIC SAFETY FUND
FOR THE YEAR ENDED JUNE 30, 2023
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 606,567 $ 606,567 $ 606,567 $ - Resources (Inflows):
Intergovernmental 100,000 250,000 286,934 36,934
Use of money and property - - 8,896 8,896
Amounts Available for Appropriations 706,567 856,567 902,397 45,830 Charges to Appropriations (Outflows):
Current:
Public safety - 206,950 191,102 15,848
Capital outlay - - 96 (96)
Total Charges to Appropriations - 206,950 191,198 15,752 Budgetary Fund Balance, June 30 $ 706,567 $ 649,617 $ 711,199 $ 61,582 Budget Amounts
106
CITY OF SOLANA BEACH, CALIFORNIA
BUDGETARY COMPARISON SCHEDULE
FIRE MITIGATION FUND
FOR THE YEAR ENDED JUNE 30, 2023
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 56,053 $ 56,053 $ 56,053 $ - Resources (Inflows):
Charges for services 10,000 16,000 16,384 384
Amounts Available for Appropriations 66,053 72,053 72,437 384 Charges to Appropriations (Outflows):
Current:
Public safety 6,000 12,000 7,566 4,434
Total Charges to Appropriations 6,000 12,000 7,566 4,434 Budgetary Fund Balance, June 30 $ 60,053 $ 60,053 $ 64,871 $ 4,818 Budget Amounts
107
CITY OF SOLANA BEACH, CALIFORNIA
BUDGETARY COMPARISON SCHEDULE
CDBG FUND
FOR THE YEAR ENDED JUNE 30, 2023
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ (16,429) $ (16,429) $ (16,429) $ - Resources (Inflows):
Intergovernmental 45,700 85,776 137,476 51,700
Amounts Available for Appropriations 29,271 69,347 121,047 51,700 Charges to Appropriations (Outflows):
Current:
Public safety - 31,150 31,150 -
Capital outlay 45,700 106,326 106,634 (308)
Total Charges to Appropriations 45,700 137,476 137,784 (308) Budgetary Fund Balance, June 30 $ (16,429) $ (68,129) $ (16,737) $ 51,392 Budget Amounts
108
CITY OF SOLANA BEACH, CALIFORNIA
BUDGETARY COMPARISON SCHEDULE
COASTAL AREA BUSINESS/VISITOR ASSISTANCE AND ENHANCEMENT FUND FOR THE YEAR ENDED JUNE 30, 2023
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 1,000,933 $ 1,000,933 $ -$ 1,000,933 Resources (Inflows):
Taxes and assessments 143,000 143,000 223,403 80,403
Use of money and property 10,000 10,000 7,062 (2,938)
Other revenues - - 4,151 4,151
Amounts Available for Appropriations 1,153,933 1,153,933 1,235,549 81,616 Charges to Appropriations (Outflows):
Current:
Community development 53,100 93,100 75,888 17,212
Total Charges to Appropriations 53,100 93,100 75,888 17,212 Budgetary Fund Balance, June 30 $ 1,100,833 $ 1,060,833 $ 1,159,661 $ 98,828 Budget Amounts
109
CITY OF SOLANA BEACH, CALIFORNIA
BUDGETARY COMPARISON SCHEDULE
MISCELLANEOUS GRANTS FUND
FOR THE YEAR ENDED JUNE 30, 2023
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 237,522 $ 237,522 $ 237,522 $ - Resources (Inflows):
Intergovernmental - 1,640,343 1,516,557 (123,786)
Use of money and property - - 16,079 16,079
Amounts Available for Appropriations 237,522 1,877,865 1,770,158 (107,707) Charges to Appropriations (Outflows):
Current:
Public safety - - 5,000 (5,000)
Public works - - 23,239 (23,239)
Capital outlay - 353,044 62,338 290,706
Transfers out 941,285 1,591,285 1,591,285 -
Total Charges to Appropriations 941,285 1,944,329 1,681,862 262,467 Budgetary Fund Balance, June 30 $ (703,763) $ (66,464) $ 88,296 $ 154,760 Budget Amounts
110
CITY OF SOLANA BEACH, CALIFORNIA
BUDGETARY COMPARISON SCHEDULE
DEVELOPER PASS-THRU FUND
FOR THE YEAR ENDED JUNE 30, 2023
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ (87) $ (87) $ (87) $ - Resources (Inflows):
Charges for services 100,000 100,000 81,274 (18,726)
Amounts Available for Appropriations 99,913 99,913 81,187 (18,726) Charges to Appropriations (Outflows):
Current:
Community development 100,000 115,288 81,187 34,101
Total Charges to Appropriations 100,000 115,288 81,187 34,101 Budgetary Fund Balance, June 30 $ (87) $ (15,375) $ - $ 15,375 Budget Amounts
111
CITY OF SOLANA BEACH, CALIFORNIA
BUDGETARY COMPARISON SCHEDULE
HOUSING FUND
FOR THE YEAR ENDED JUNE 30, 2023
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 1,388,377 $ 1,388,377 $ 1,388,377 $ - Resources (Inflows):
Use of money and property 6,000 6,000 7,325 1,325
Amounts Available for Appropriations 1,394,377 1,394,377 1,395,702 1,325 Charges to Appropriations (Outflows):
Current:
Community development 10,000 10,000 853 9,147
Total Charges to Appropriations 10,000 10,000 853 9,147 Budgetary Fund Balance, June 30 $ 1,384,377 $ 1,384,377 $ 1,394,849 $ 10,472 Budget Amounts
112
CITY OF SOLANA BEACH, CALIFORNIA
BUDGETARY COMPARISON SCHEDULE
CAMP PROGRAMS FUND
FOR THE YEAR ENDED JUNE 30, 2023
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 79,041 $ 79,041 $ 79,041 $ - Resources (Inflows):
Charges for services 525,000 525,000 548,515 23,515
Amounts Available for Appropriations 604,041 604,041 627,556 23,515 Charges to Appropriations (Outflows):
Current:
Public safety 455,885 501,169 456,703 44,466
Community services 85,055 104,916 85,002 19,914
Total Charges to Appropriations 540,940 606,085 541,705 64,380 Budgetary Fund Balance, June 30 $ 63,101 $ (2,044) $ 85,851 $ 87,895 Budget Amounts
113
CITY OF SOLANA BEACH, CALIFORNIA
BUDGETARY COMPARISON SCHEDULE
SB1 STREETS & ROADS FUND
FOR THE YEAR ENDED JUNE 30, 2023
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 267,499 $ 267,499 $ 267,499 $ - Resources (Inflows):
Taxes and assessments 280,400 305,400 287,829 (17,571)
Use of money and property - - 2,874 2,874
Amounts Available for Appropriations 547,899 572,899 558,202 (14,697) Charges to Appropriations (Outflows):
Capital outlay 290,000 457,311 37,229 420,082
Total Charges to Appropriations 290,000 457,311 37,229 420,082 Budgetary Fund Balance, June 30 $ 257,899 $ 115,588 $ 520,973 $ 405,385 Budget Amounts
114
CITY OF SOLANA BEACH, CALIFORNIA
BUDGETARY COMPARISON SCHEDULE
CITY CIP FUND
FOR THE YEAR ENDED JUNE 30, 2023
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 4,394,934 $ 4,394,934 $ 4,394,934 $ - Resources (Inflows):
Charges for services 50,000 270,000 264,997 (5,003)
Use of money and property 6,800 6,800 (29,288) (36,088) Other revenues 50,000 340,000 366,516 26,516
Transfers in 360,000 2,841,916 2,841,916 -
Amounts Available for Appropriations 4,861,734 7,853,650 7,839,075 (14,575) Charges to Appropriations (Outflows):
Current:
Public works - - 1,517 (1,517)
Capital outlay 360,000 2,978,797 1,146,827 1,831,970
Total Charges to Appropriations 360,000 2,978,797 1,148,344 1,830,453 Budgetary Fund Balance, June 30 $ 4,501,734 $ 4,874,853 $ 6,690,731 $ 1,815,878 Budget Amounts
115
CITY OF SOLANA BEACH, CALIFORNIA
BUDGETARY COMPARISON SCHEDULE
SAND REPLENISHMENT
FOR THE YEAR ENDED JUNE 30, 2023
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 1,188,648 $ 1,188,648 $ 1,188,648 $ - Resources (Inflows):
Taxes and assessments 265,000 265,000 446,805 181,805
Intergovernmental - 746,151 8,465,943 7,719,792
Use of money and property 8,000 8,000 4,717 (3,283)
Amounts Available for Appropriations 1,461,648 2,207,799 10,106,113 7,898,314 Charges to Appropriations (Outflows):
Current:
Capital outlay 191,850 2,114,480 9,012,336 (6,897,856)
Total Charges to Appropriations 191,850 2,114,480 9,012,336 (6,897,856) Budgetary Fund Balance, June 30 $ 1,269,798 $ 93,319 $ 1,093,777 $ 1,000,458 Budget Amounts
116
CITY OF SOLANA BEACH, CALIFORNIA
BUDGETARY COMPARISON SCHEDULE
CITY DEBT SERVICE FUND
FOR THE YEAR ENDED JUNE 30, 2023
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 25,824 $ 25,824 $ 25,824 $ - Resources (Inflows):
Transfers in 217,900 217,900 217,900 -
Amounts Available for Appropriations 243,724 243,724 243,724 - Charges to Appropriations (Outflows):
Current:
Debt service:
Principal retirement 203,825 203,825 203,808 17
Interest and fiscal charges 14,040 14,040 14,031 9
Total Charges to Appropriations 217,865 217,865 217,839 26 Budgetary Fund Balance, June 30 $ 25,859 $ 25,859 $ 25,885 $ 26 Budget Amounts
117
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 as debt service on bonds that were issued to pay for the underground 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 a custodial fund because the City has no responsibility for the debt service on the bonds.
118
CITY OF SOLANA BEACH, CALIFORNIA
COMBINING STATEMENT OF FIDUCIARY NET POSITION
CUSTODIAL FUNDS
JUNE 30, 2023
Undergrounding South Solana
Districts Sewer District Total
ASSETS
Cash and cash equivalents $ 222,896 $ 43,096 $ 265,992
Investments:
Money market mutual funds 368 50 418
Local Agency Investment Fund 58,452 - 58,452
Asset-backed securities 12,959 1,754 14,713
Federal agency securities 38,724 5,241 43,965
Medium term corporate notes 34,183 4,626 38,809
Supranational securities 3,317 449 3,766
US Treasury securities 81,100 10,974 92,074
Receivables:
Accrued interest 1,088 158 1,246
Due from other governments 879 19 898
Total Assets 453,966 66,367 520,333
LIABILITIES
Accounts payable 2,541 1,180 3,721
Total Liabilities 2,541 1,180 3,721
NET POSITION
Restricted for:
Individuals, organizations, and other governments 451,425 65,187 516,612 Total Net Position $ 451,425 $ 65,187 $ 516,612
119
CITY OF SOLANA BEACH, CALIFORNIA
COMBINING STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
CUSTODIAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2023
Undergrounding South Solana
Districts Sewer District Total
ADDITIONS
Investment earnings $ 4,490 $ 700 $ 5,190
Special assessment collections 192,492 42,010 234,502
Total Additions 196,982 42,710 239,692
DEDUCTIONS
Contractual services 9,748 1,233 10,981
Principal 80,000 20,000 100,000
Interest expense 87,612 18,820 106,432
Total Deductions 177,360 40,053 217,413
Net Increase (Decrease) in Fiduciary Net Position 19,622 2,657 22,279 Net Position - Beginning 431,803 62,530 494,333
Net Position - Ending $ 451,425 $ 65,187 $ 516,612
120
2014 2015 2016 2017 2018
Government activities
Net Investment in Capital Assets $ 34,095,894 $ 32,415,836 $ 30,365,711 $ 28,412,121 $ 27,241,251 Restricted 5,183,814 4,979,850 5,825,595 6,619,853 9,139,181 Unrestricted 6,871,872 (85,816) 1,230,929 1,795,456 (2,320,375) Total governmental activities net position $ 37,309,870$ 37,422,235$ 36,827,430$ 34,060,057$ 46,151,580 Business-type activities
Net Investment in Capital Assets $ 6,324,862 $ 6,798,584 $ 5,594,350 $ 6,195,352 $ 5,929,088 Restricted - - - - 54
Unrestricted 27,155,489 26,759,779 29,711,194 32,866,729 36,722,015 Total governmental activities net position $ 33,558,363$ 35,305,544$ 39,062,081$ 42,651,157$ 33,480,351 Primary government
Net Investment in Capital Assets $ 40,420,756 $ 39,214,420 $ 35,960,061 $ 34,607,473 $ 33,170,339 Restricted 5,183,814 4,979,850 5,825,595 6,619,853 9,139,235 Unrestricted 34,027,361 26,673,963 30,942,123 34,662,185 34,401,640 Total governmental activities net position $ 79,631,931 $ 70,868,233 $ 72,727,779 $ 75,889,511 $ 76,711,214 Fiscal Year
CITY OF SOLANA BEACH
Net Position by Component
Last Ten Fiscal Years
(Accrual Basis of Accounting)
121
2019 2020 2021 2022 2023
Government activities
Net Investment in Capital Assets $ 29,396,878 $ 26,666,266 $ 26,653,123 $ 26,396,682 $ 34,677,741 Restricted 11,238,745 12,664,581 14,173,748 17,970,956 21,964,017 Unrestricted (3,911,422) (1,487,812) (1,345,933) 289,940 5,289,026 Total governmental activities net position $ 37,843,035$ 39,480,938$ 44,657,578$ 61,930,784$ 36,724,201 Business-type activities
Net Investment in Capital Assets $ 8,892,771 $ 12,052,987 $ 11,185,890 $ 11,656,188 $ 11,547,573 Restricted 49 46 - - -
Unrestricted 35,710,517 34,349,803 36,889,897 38,140,613 39,496,180 Total governmental activities net position $ 46,402,836$ 48,075,787$ 49,796,801$ 51,043,753$ 44,603,337 Primary government
Net Investment in Capital Assets $ 38,289,649 $ 38,719,253 $ 37,839,013 $ 38,052,870 $ 46,225,314 Restricted 11,238,794 12,664,627 14,173,748 17,970,956 21,964,017 Unrestricted 31,799,095 32,861,991 35,543,964 38,430,553 44,785,206 Total governmental activities net position $ 81,327,538 $ 84,245,871 $ 87,556,725 $ 94,454,379 $ 112,974,537
CITY OF SOLANA BEACH
Net Position by Component
Last Ten Fiscal Years
(Accrual Basis of Accounting)
Fiscal Year
122
2014 2015 2016 2017 2018
Expenses
Governmental Activities:
General government $ 3,712,734 $ 3,344,429 $ 3,944,303 $ 4,309,372 $ 4,101,170 Public safety 8,416,330 8,441,144 9,162,345 9,628,140 10,539,671 Public works 5,008,665 5,181,223 5,438,407 5,487,183 5,944,432 Community development 1,361,588 1,281,059 1,378,130 1,745,101 1,754,910 Community services 579,088 622,608 627,748 1,122,128 730,645 Interest on long-term debt 439,918 388,144 398,408 389,077 381,634 Total Governmental Activities expenses $ 19,518,323 $ 19,258,607 $ 20,949,341 $ 22,681,001 $ 23,452,462 Business-Type Activities:
Sanitation $ 2,855,368 $ 4,566,357 $ 3,568,901 $ 1,602,359 $ 2,100,256 Solana Energy Alliance Fund - - - - 390,533
Total Business-Type Activities Expenses $ 2,855,368 $ 4,566,357 $ 3,568,901 $ 1,602,359 $ 2,490,789 Total Primary Government Expenses $ 22,373,691 $ 23,824,964 $ 24,518,242 $ 24,283,360 $ 25,943,251 Program Revenues
Governmental Activities:
Charges for services:
General government $ - $ - $ - $ - $ -
Public safety 402,670 464,533 578,282 620,990 577,351
Public works 743,210 238,587 416,524 449,962 698,999
Community development 830,429 852,578 928,065 1,252,126 1,300,411 Community services 303,070 347,698 365,289 400,353 336,079 Operating Contributions:
General government - - - - -
Public safety 286,687 285,399 270,152 198,615 177,936
Public works 1,577,961 920,807 1,045,301 1,241,379 1,106,636 Community development - 109,689 200,388 - 100,000
Community services - - - 129,324 139,416
Capital Contributions and Grants:
General government - - - - -
Community development - - - - -
Public safety 129,740 53,091 160,372 158,370 420,005
Total Governmental Activities Program Revenues $ 4,273,767 $ 3,272,382 $ 3,964,373 $ 4,451,119 $ 4,856,833 Business-Type Activities:
Charges for services:
Sanitation $ 4,775,489 $ 4,949,069 $ 5,151,671 $ 5,255,483 $ 5,415,690 Solana Energy Alliance Fund - - - - 494,307
Total Business-Type Activities Program Revenues 4,775,489 4,949,069 5,151,671 5,255,483 5,909,997 Total Primary Government Program Revenues $ 9,049,256 $ 8,221,451 $ 9,116,044 $ 9,706,602 $ 10,766,830 Net (Expense)/Revenue
Governmental Activities $ (15,244,556) $ (15,986,225) $ (16,984,968) $ (18,229,882) $ (18,595,629) Business-Type Activities 1,920,121 382,712 1,582,770 3,653,124 3,419,208 Total primary Government Net Expense $ (13,324,435) $ (15,603,513) $ (15,402,198) $ (14,576,758) $ (15,176,421) General Revenues and Other Charges in Net Position
Governmental Activities:
Taxes:
Property taxes, levied for general purpose $ 6,880,916 $ 7,247,202 $ 7,705,956 $ 8,095,383 $ 8,586,838 Transient occupancy taxes 1,220,075 1,467,373 1,605,685 1,740,208 1,827,753 Sales taxes 2,814,702 2,808,203 3,255,104 3,127,803 3,191,410 Franchise taxes 714,991 765,995 736,042 733,354 723,164 Motor Vehicle in Lieu - Unrestricted 2,736,146 2,747,073 2,797,559 2,868,629 3,170,331 Use of money and property 137,906 136,763 261,446 283,828 286,867 Other 1,399,850 914,672 735,521 785,872 722,186
Total Governmental Activities $ 15,904,586 $ 16,087,281 $ 17,097,313 $ 17,635,077 $ 18,508,549 Business-Type Activities:
Use of money and property $ 71,541 $ 71,973 $ 115,321 $ 88,940 $ 81,629 Other 36,300 28,939 49,090 14,473 88,239
Total Business-Type Activities 107,841 100,912 164,411 103,413 169,868 Total Primary Government $ 16,012,427 $ 16,188,193 $ 17,261,724 $ 17,738,490 $ 18,678,417 Changes in Net Position
Governmental Activities $ 660,030 $ 101,056 $ 112,345 $ (594,805) $ (87,080) Business-Type Activities 2,027,962 483,624 1,747,181 3,756,537 3,589,076 Total Primary Government $ 2,687,992 $ 584,680 $ 1,859,526 $ 3,161,732 $ 3,501,996 Fiscal Year
CITY OF SOLANA BEACH
(Accrual Basis of Accounting)
Last Ten Fiscal Years
Changes in Net Position
123
2019 2020 2021 2022 2023
Expenses
Governmental Activities:
General government $ 3,650,982 $ 4,985,418 $ 5,537,474 $ 4,569,515 $ 4,490,903 Public safety 11,050,684 12,629,778 13,116,915 13,906,293 11,414,093 Public works 5,937,131 4,887,985 4,665,830 5,411,937 5,377,186 Community development 1,482,428 1,585,952 1,506,502 1,505,023 1,260,610 Community services 1,178,128 1,220,410 1,193,256 1,218,243 919,234 Interest on long-term debt 368,495 363,326 356,001 346,224 385,479 Total Governmental Activities expenses $ 23,667,848 $ 25,672,869 $ 26,375,978 $ 26,957,235 $ 23,847,505 Business-Type Activities:
Sanitation $ 4,204,504 $ 4,221,307 $ 3,891,241 $ 4,308,057 $ 5,019,606 Solana Energy Alliance Fund 5,210,816 4,350,085 3,841,312 (126,572) 19,229 Total Business-Type Activities Expenses $ 9,415,320 $ 8,571,392 $ 7,732,553 $ 4,181,485 $ 5,038,835 Total Primary Government Expenses $ 33,083,168 $ 34,244,261 $ 34,108,531 $ 31,138,720 $ 28,886,340 Program Revenues
Governmental Activities:
Charges for services:
General government $ 194,122 $ 205 $ 91,875 $ 31,397 $ 1,126,175 Public safety 581,313 401,633 325,042 384,525 463,056
Public works 1,005,828 358,450 493,597 1,566,345 604,621 Community development 1,169,232 1,190,562 1,082,510 1,274,370 1,597,048 Community services 335,828 22,844 276,648 507,312 548,527 Operating Contributions:
General government - - - (14,868) -
Public safety 186,145 199,300 466,509 453,244 418,396
Public works 1,404,721 889,429 1,214,732 2,673,246 2,587,247 Community development - - - - 2,000
Community services 148,747 80,000 232,674 161,285 165,271 Capital Contributions and Grants:
General government - - - (111,858) -
Community development - - - - 8,465,943
Public safety 298,205 345,162 301,580 - -
Total Governmental Activities Program Revenues $ 5,324,141 $ 3,487,585 $ 4,485,167 $ 6,924,998 $ 15,978,284 Business-Type Activities:
Charges for services:
Sanitation $ 5,592,045 $ 5,588,249 $ 5,676,286 $ 5,816,828 $ 5,846,765 Solana Energy Alliance Fund 5,202,375 4,178,287 3,567,034 1,359 752 Total Business-Type Activities Program Revenues 10,794,420 9,766,536 9,243,320 5,818,187 5,847,517 Total Primary Government Program Revenues $ 16,118,561 $ 13,254,121 $ 13,728,487 $ 12,743,185 $ 21,825,801 Net (Expense)/Revenue
Governmental Activities $ (18,343,707) $ (22,185,284) $ (21,890,811) $ (20,032,237) $ (7,869,221) Business-Type Activities 1,379,100 1,195,144 1,510,767 1,636,702 808,682 Total primary Government Net Expense $ (16,964,607) $ (20,990,140) $ (20,380,044) $ (18,395,535) $ (7,060,539) General Revenues and Other Charges in Net Position
Governmental Activities:
Taxes:
Property taxes, levied for general purpose $ 9,070,200 $ 9,465,402 $ 10,093,847 $ 10,523,133 $ 11,638,632 Transient occupancy taxes 2,019,005 1,456,897 1,457,156 2,575,173 5,845,967 Sales taxes 3,502,561 3,291,805 3,689,566 4,413,265 2,904,236 Franchise taxes 792,575 751,324 789,365 873,791 897,472 Motor Vehicle in Lieu - Unrestricted 3,547,175 3,619,856 3,745,720 3,880,489 2,053,486 Use of money and property 1,100,795 1,132,930 631,813 (399,689) 783,458 Other 975,510 3,585,904 3,121,247 3,342,715 1,019,176
Total Governmental Activities $ 21,007,821 $ 23,304,118 $ 23,528,714 $ 25,208,877 $ 25,142,427 Business-Type Activities:
Use of money and property $ 557,179 $ 423,002 $ 124,888 $ 35,005 $ 149,640 Other 15,901 181,353 37,296 49,307 288,630
Total Business-Type Activities 573,080 604,355 162,184 84,312 438,270 Total Primary Government $ 21,580,901 $ 23,908,473 $ 23,690,898 $ 25,293,189 $ 25,580,697 Changes in Net Position
Governmental Activities $ 2,664,114 $ 1,118,834 $ 1,637,903 $ 5,176,640 $ 17,273,206 Business-Type Activities 1,952,180 1,799,499 1,672,951 1,721,014 1,246,952 Total Primary Government $ 4,616,294 $ 2,918,333 $ 3,310,854 $ 6,897,654 $ 18,520,158 Fiscal Year
(Accrual Basis of Accounting)
Last Ten Fiscal Years
Changes in Net Position
CITY OF SOLANA BEACH
124
# 2014 2015 2016 2017 2018
General Fund
Nonspendable $ 7,523 $ 9,382 $ 7,471 $ 20,164 $ 72,579
Restricted - - 508,897 893,185 1,294,957
Committed 324,083 454,048 787,790 914,846 1,015,354
Assigned 5,102,543 5,324,048 5,520,890 5,690,381 5,805,890 Unassigned 4,369,152 5,580,686 6,200,244 6,805,201 7,385,736 Total General Fund 11,368,164 13,025,292 14,323,777 15,574,516 9,803,301 All Other Governmental Funds
Nonspendable $ - $ - $ - $ - $ 200
Restricted 5,107,900 4,979,850 5,316,698 5,726,668 7,844,224 Assigned 425,416 589,120 849,917 1,385,099 -
Unassigned (222,713) (213,005) (184,544) (336,475) (234,689) Total all other Governmental Funds 5,355,965 5,982,071 6,775,292 7,609,735 5,310,603 Fiscal Year
CITY OF SOLANA BEACH
Fund Balances of Governmental Funds
Last Ten Fiscal Years
(Modified Accrual Basis Of Accounting)
125
2019 2020 2021 2022 2023
General Fund
Nonspendable $ 23,402 $ 52,665 $ 54,212 $ 136,395 $ 41,589 Restricted 1,743,908 2,422,056 3,245,475 3,218,592 5,003,450 Committed 1,436,307 1,179,507 901,576 1,295,357 1,292,880 Assigned 6,041,593 6,349,702 6,206,689 6,241,345 6,786,980 Unassigned 4,588,069 5,450,148 7,138,002 9,289,801 10,055,355 Total General Fund 15,454,078 17,545,954 20,181,490 23,180,254 13,833,279 All Other Governmental Funds
Nonspendable $ - $ - $ - $ 47,545 $ 47,545
Restricted 9,494,837 10,242,525 10,928,273 14,752,364 16,960,567 Assigned - - - - -
Unassigned (112,596) (58,138) (464,267) (227,092) 1,077,040 Total all other Governmental Funds 10,184,387 10,464,006 14,572,817 18,085,152 9,382,241 Fiscal Year
CITY OF SOLANA BEACH
Fund Balances of Governmental Funds
Last Ten Fiscal Years
(Modified Accrual Basis Of Accounting)
126
2014 2015 2016 2017 2018
Revenues:
Taxes and assessments $ 13,135,199 $ 13,727,132 $ 14,719,229 $ 15,109,053 $ 15,945,223 Intergovernmental 3,217,319 2,674,057 3,069,673 3,185,272 3,498,266 Licenses and permits 429,464 461,687 471,581 527,146 508,549 Charges for services 959,935 1,001,943 1,313,658 1,699,140 1,584,561 Fines and forfeitures 348,337 392,683 502,921 495,885 479,933 Use of money and property 137,906 136,763 261,466 283,828 286,867 Other 1,941,493 961,755 735,521 785,872 1,061,983
Total revenues 20,169,653 19,356,020 21,074,049 22,086,196 23,365,382 Expenditures:
General government 3,085,499 3,222,933 3,500,443 3,777,819 3,820,029 Public safety 8,238,659 8,315,766 8,912,742 9,070,746 9,831,070 Public works 2,215,596 2,322,090 2,463,442 2,509,194 2,628,777 Community development 1,360,192 1,291,073 1,380,934 1,721,715 1,574,333 Community services 259,809 275,790 278,481 760,475 328,755 Capital outlay 3,452,914 1,773,690 2,190,316 1,473,835 2,417,383 Debt service:
Principal retirement 155,925 155,930 161,086 288,487 296,366 Interest 439,464 388,523 383,130 392,219 383,487
Total expenses 19,208,058 17,745,795 19,270,574 19,994,490 21,280,200 Excess (Deficiency) of Revenues
Over (Under) Expenditures 961,595 1,610,225 1,803,475 2,091,706 2,085,182 Other financing sources (uses):
Transfers in 1,319,473 446,865 743,400 1,576,800 997,300 Transfers out (1,319,473) (446,865) (743,400) (1,576,800) (997,300) Contributions to Successor Agency (10,000) - - - -
Contributions to OPEB Trust Fund - - (135,000) - -
Long-term debt issued 5,500,000 - 614,759 - -
Capital leases - - - - -
Total other financing sources (uses) 5,490,000 - 479,759 - - Net change in fund balances /
net position 6,451,595 1,610,225 2,283,234 2,091,706 2,085,182 Capital assets used in debt
service calculation* $ 3,527,607 $ 1,764,750 $ 2,194,361 $ 1,440,550 $ 2,432,556 Debt service as a percentage of
noncapital expenditures 3.8% 3.4% 3.2% 3.7% 3.6%
* 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)
127
2019 2020 2021 2022 2023
Revenues:
Taxes and assessments $ 17,275,214 $ 16,842,473 $ 19,775,654 $ 22,265,851 $ 24,943,501 Intergovernmental 3,665,899 3,284,923 1,916,664 3,322,539 11,286,855 Licenses and permits 486,891 345,168 532,496 773,593 1,089,274 Charges for services 2,230,614 1,268,823 1,449,714 2,754,210 1,802,138 Fines and forfeitures 502,249 359,703 244,331 261,932 408,220 Use of money and property 1,100,795 1,132,930 631,813 (399,689) 783,458 Other 975,510 3,585,904 3,121,247 3,348,906 4,102,253
Total revenues 26,237,172 26,819,924 27,671,919 32,327,342 44,415,699 Expenditures:
General government 4,191,376 4,705,339 5,032,268 5,598,530 7,061,076 Public safety 10,243,546 11,573,438 12,538,907 12,043,209 12,708,776 Public works 2,975,518 3,401,680 3,125,907 3,792,133 4,324,397 Community development 1,523,428 1,544,402 1,446,878 1,347,528 1,625,027 Community services 830,315 797,410 680,982 825,180 843,668 Capital outlay 5,763,230 1,692,966 1,800,676 1,430,880 10,752,411 Debt service:
Principal retirement 303,971 316,505 319,071 199,531 203,808 Interest 374,519 365,239 355,735 346,004 385,436
Total expenses 26,205,903 24,396,979 25,300,424 25,582,995 37,904,599 Excess (Deficiency) of Revenues
Over (Under) Expenditures 31,269 2,422,945 2,371,495 6,744,347 6,511,100 Other financing sources (uses):
Transfers in 2,636,370 799,915 353,500 2,992,483 5,093,101 Transfers out (2,636,370) (799,915) (353,500) (2,992,483) (5,093,101) Contributions to Successor Agency - - - - -
Contributions to OPEB Trust Fund - - - - -
Long-term debt issued - - - - -
Capital leases - - - - -
Total other financing sources (uses) - - - - -
Net change in fund balances /
net position 31,269 2,422,945 2,371,495 6,744,347 6,511,100 Capital assets used in debt
service calculation* $ 5,754,228 $ 1,697,994 $ 1,723,018 $ 1,537,279 $ 10,105,863 Debt service as a percentage of
noncapital expenditures 3.3% 3.0% 2.9% 2.3% 2.1%
* 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)
128
Taxable Assessed
Total Estimated Value as a
Less: Total Taxable Direct Actual Percentage of
Fiscal Residential Commercial Other Tax-Exempt Assessed Tax Taxable Actual Year Property Property Property Property Value Rate ValueaTaxable Value 2014 3,150,064 457,092 154,207 - 3,761,363 0.1803% N/A N/A 2015 3,348,897 471,453 159,027 - 3,979,377 0.1779% N/A N/A 2016 3,549,149 490,565 161,797 - 4,201,511 0.1778% N/A N/A 2017 3,750,959 504,604 173,545 - 4,429,108 0.1779% N/A N/A 2018 3,974,035 567,922 182,779 - 4,724,736 0.1778% N/A N/A 2019 4,237,025 598,064 202,769 - 5,037,858 0.1778% N/A N/A 2020 4,476,935 618,256 192,564 - 5,287,755 0.1779% N/A N/A 2021 4,713,080 632,197 201,845 - 5,547,122 0.1780% N/A N/A 2022 4,907,207 642,174 195,653 - 5,745,034 0.1781% N/A N/A 2023 5,309,190 657,405 263,918 - 6,230,513 0.1780% N/A N/A (a) The County of San Diego does not compile Estimated Actual Valuations N/A - Data not available
Source: San Diego County Assessor 2013/14 - 2022/23 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)
129
General
Basic Municipal Total City's
Fiscal Tax Improvement Lighting Share of 1%
Year Levy District District Levy per Prop 13
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
2022 0.1602 0.0037 0.00955 0.1735
2023 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) 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
2022 0.167490 0.0004 0.40290 0.10490 0.025330
2023 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:
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
San Diego County Assessor 2022/23 Annual Tax Increment Tables and HdL Coren and Cone.
(rate per $100 of taxable value)
City's Share of 1% Levy Per Prop 13
Overlapping Rates
CITY OF SOLANA BEACH
Direct and Overlapping Property Tax Rates
Last Ten Fiscal Years
130
Solana Beach Metropolitan Santa Fe Mira Costa San Dieguito Total Educational School District Water Irrigation Comm Prop Aa Direct & Fiscal Revenue Prop JJ District Tax Rate College 11/6/2013 Overlapping Year Augmentation Debt Service Debt Service Reduction 2016A 2013A A1 Tax Rate 2014 0.12551 - 0.0035 - - 0.0378 1.04131
2015 0.12551 - 0.0035 - - 0.0215 1.02497
2016 0.12551 - 0.0035 - - 0.0227 1.02622
2017 0.12551 - 0.0035 - - 0.0228 1.02625
2018 0.12550 0.03093 0.0035 - 0.01443 0.0223 1.07115
2019 0.12550 0.02886 0.0035 - 0.01294 0.0230 1.06828
2020 0.12550 0.02800 0.0035 - 0.01299 0.0232 1.06767
2021 0.12550 0.02688 0.0035 - 0.01373 0.0233 1.06738
2022 0.12550 0.02653 0.0035 - 0.01339 0.0223 1.06575
2023 0.12550 0.02506 0.0035 - 0.01357 0.0214 1.06356
Overlapping Rates
Voter Approved (3)
(rate per $100 of taxable value)
CITY OF SOLANA BEACH
Direct and Overlapping Property Tax Rates
Last Ten Fiscal Years
131
Percentage
of Total City
Taxable Taxable
Assessed Assessed
Taxpayer Value Value
For the Fiscal Year Ended June 30, 2023
S B T C Holdings LLC (Pending Appeals on Parcels) $ 106,588,923 1.73% Pacific Solana Beach Holdings LP (Pending Appeals on Parcels) 74,305,420 1.20% SB Coporate Centre III-IV LLC 61,684,886 1.00%
Solana Beach Self Storage Owner LP 48,500,000 0.79%
G R E Beachwalk LLC (Pending Appeals on Parcels) 36,363,732 0.59% Sanyo Foods Corporation of America 35,058,180 0.57%
Fenton Solana Highlands LLC 34,032,084 0.55%
E R P Operating LP 21,388,414 0.35%
Lavida Delmar Asscs LP 18,250,950 0.30%
Solana Mar LLC 17,163,703 0.28%
Total $ 453,336,292 7.34%
For the Fiscal Year Ended June 30, 2014
S B T C Holdings LLC (Pending Appeals on Parcels) $ 112,943,400 3.03% Pacific Solana Beach Holdings LP (Pending Appeals on Parcels) 63,353,220 1.70% SB Corporate Centre III-IV LLC 31,650,600 0.85%
Sanyo Foods Corporation of America 30,193,367 0.81%
Fenton Solana Highlands LLC 28,781,614 0.77%
E R P Operating LP 18,400,666 0.49%
Muller-Beachwalk LLC (Pending Appeals on Parcels) 17,888,000 0.48% Lavida Delmar Asscs LP 16,367,249 0.44%
Urschel Laboratories Inc 13,341,767 0.36%
Price Self Storage Solana Beach LLC 12,999,381 0.35%
Total $ 345,919,264 9.29%
Source: HdL Coren & Cone and San Diego
County Assessor 2013/14 & 2022/23
CITY OF SOLANA BEACH
Principal Property Tax Payers
Current Year and Ten Years Ago
132
Fiscal
Year Taxes Levied Collections
Ended for the Percentage in Subsequent Percentage
June 30, Fiscal Year Amount of Levy Years Amount of Levy 2014 6,303,038 6,033,082 95.7% 252,973 6,286,055 100%
2015 6,576,197 6,257,093 95.1% 215,422 6,472,515 98%
2016 6,931,466 6,635,180 95.7% 80,163 6,715,343 97%
2017 7,300,293 7,017,400 96.1% 27,141 7,044,541 96%
2018 7,741,663 7,444,166 96.2% 33,622 7,477,788 97%
2019 8,232,844 7,949,648 96.6% 27,740 7,977,388 97%
2020 8,622,755 8,306,418 96.3% 36,401 8,342,819 97%
2021 9,074,415 8,652,200 95.3% 65,224 8,717,424 96%
2022 9,507,779 9,078,200 95.5% 70,616 9,148,816 96%
2023 10,371,116 10,237,578 98.7% 16,297 10,253,875 99%
Sources: City of Solana Beach Finance Department, County of San Diego Office of Auditor-Controller.
Collected within the
Fiscal Year of the Levy Total Collections to Date
CITY OF SOLANA BEACH
Property Tax Levies and Collections
Last Ten Fiscal Years
133
Business-type
Activities
2002 ABAG Refunding Total Percentage
Fiscal Lease Revenue Lease Bonds Capital Bonds and Direct Primary of Personal Per Year Bonds ABAG Leases Borrowings/Placements Government Income a Capita a 2014* - 1,166,600 5,500,000 745,693 12,175,456 19,587,749 3.56% 1,495 2015* - 1,055,400 5,500,000 701,931 11,273,883 18,531,214 3.95% 1,419 2016 - 940,600 5,500,000 1,271,372 10,339,405 18,051,377 4.05% 1,338 2017 - 811,391 5,500,000 1,113,062 9,373,587 16,798,040 4.85% 1,242 2018 - 685,559 5,500,000 943,496 19,146,912 26,275,967 3.10% 1,885 2019 - 556,825 5,500,000 769,326 18,064,945 24,891,096 3.52% 1,786 2020 - 420,291 5,500,000 590,421 17,449,133 23,959,845 3.66% 1,731 2021 - 286,057 5,500,000 406,649 16,818,322 23,011,028 3.89% 1,664 2022 - 144,423 5,500,000 349,819 16,262,766 22,257,008 4.04% 1,737 2023 - - 5,500,000 291,011 15,694,711 21,485,722 4.31% 1,681 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 Details regarding the city's outstanding debt can be found in the notes to the financial statements.
CITY OF SOLANA BEACH
Ratios of Outstanding Debt by Type,
Last Ten Fiscal Years
(dollars in thousands, except per capita)
Government Activities
134
Fiscal Year 2022-23 Assessed Valuation : $ 6,231,357,887 Percent Net
Gross Bonded Applicable Bonded
Overlapping Tax & Assessment Debt Debt Balance to City (1) Debt $ 19,215,000 0.171% $ 32,858
$ 376,155,000 4.640% $ 17,453,592
$ 416,410,000 7.670% $ 31,938,647
$ 25,570,000 1.352% $ 345,706
$ 89,095,000 32.263% $ 28,744,720
$ 2,075,000 100.000% $ 2,075,000
$ 4,605,000 0.555% 25,558 $
$ 80,616,081
$ 229,680,000 0.949% $ 2,179,663
$ 277,990,000 0.949% $ 2,638,125
$ 6,935,000 0.949% 65,813 $
$ 12,730,000 7.670% $ 976,391
$ 5,819,247 27.384% $ 1,593,543
City of Solana Beach Capital Lease Obligation $ 279,445 100.000% 279,445 $ 7,732,980
$ 2,035,900 100.000% $ 2,035,900
TOTAL DIRECT DEBT $ 279,445
TOTAL OVERLAPPING DEBT $ 90,105,516
COMBINED TOTAL DEBT (2) $ 90,384,961
Debt to Assessed Valuation Ratios :
Total Overlapping Tax & Assessment Debt
Total Direct Debt ($279,445)
Combined Total Debt
Redevelopment Incremental Valuation ($206,777,910) Ratio:
Total Overlapping Tax Increment Debt
Notes:
Source: California Municipal Statistics, Inc.
Total Direct & Overlapping General Fund Debt
1.45%
(1) - Percentage of overlapping agency's assessed valuation located within the boundaries of the city.
0.98%
San Diego County Superintendent of Schools General
Fund Obligations
San Dieguito Union High School District Certificates
of Participation
0.00%
1.29%
Solana Beach School District General Fund Obligations
(2) - Excludes tax and revenue anticipation notes, enterprise revenues, mortgage revenue and tax allocation bonds and non-bonded capital lease obligations.
Metropolitan Water District
CITY OF SOLANA BEACH
Direct and Overlapping Governmental Activities Debt
As of June 30, 2023
Overlapping Tax Increment Debt
Mira Costa Community College District
San Dieguito Union High School District
San Dieguito Union High School District Community
Facilities District No. 95-1
Solana Beach School District School Facilities
Improvement District No. 2016-1
City of Solana Beach 1915 Act Bonds
Olivenhain Municipal Water District, Assessment
District No. 96-1
San Diego County General Fund Obligations
San Diego County Pension Obligations
Total Overlapping Tax & Assessment Debt
Direct & Overlapping General Fund Debt
135
Legal Debt Margin Calculation for Fiscal Year 2023
Assessed value $ 6,231,358
Debt limit (15% of assessed value) 934,704
Debt applicable to limit:
General obligation bonds -
Total net debt applicable to limit -
Legal debt margin $ 934,704
Legal Debt
Total net debt Margin
Applicable to Legal Percentage of
Fiscal Year Debt Limit Limit Debt Margin Debt Limit
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%
2022 861,939 - 861,939 100.00%
2023 934,577 - 934,577 100.00%
CITY OF SOLANA BEACH
Legal Debt Margin Information
Last Ten Fiscal Years
(dollars in thousands)
136
Use of Net
Fiscal Money & Lease/ Less: Available
Year Property Rents Expenditures Revenue
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
2022* - 147,465 - 147,465
2023* - - - -
Fiscal
Year Principal Interest Coverage
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
2022* 145,000 2,465 1.00
2023* - - 0.00
Notes:
* 2002 ABAG Lease Revenue Bonds
Expenditures do not include interest, depreciation, or amortization expenses.
CITY OF SOLANA BEACH
Pledged-Revenue Coverage
Last Ten Fiscal Years
2011 ABAG Refunded Lease Revenue Bonds
Debt Service
Details regarding the city's outstanding debt can be found in the notes to the financial statements.
137
Personal Per
Income Capita
Calendar (thousands Personal Unemployment
Year Population of dollars) Income Rate
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 59,579 1.7%
2018 13,933 875,833 62,860 1.7%
2019 13,838 873,757 63,142 1.7%
2020 13,827 894,002 64,656 5.1%
2021 12,812 899,448 70,204 2.6%
2022 12,784 925,044 72,360 1.8%
Sources: HdL Coren & Cone report prepared on 9/6/23
CITY OF SOLANA BEACH
Demographic and Economic Statistics
Last Ten Calendar Years
138
Employer Category Business category
32nd St Naval Station 3 Federal Government-National Security Collins Aerospace 1 Aircraft Components-Manufacturers
General Dynamics Nassco 1 Ship Builders & Repairers (Mfrs) Illumina Inc 1 Biotechnology Products & Services
Kaiser Permanente Vandever Med 2 Physicians & Surgeons
MCCS MCRD 3 Military Bases
Merchants Building Maintenance 1 Janitor Service
Page One Seo 1 Mental Health Services
Rady's Children's Hospital 1 Hospitals
San Diego Community College 2 Junior-Community College- Tech Institutes San Diego County Sheriff 1 Police Departments
Scripps Mercy Hospital 1 Hospitals
Scripps Research Institute 1 Laboratories-Research & Development SDG & E 1 Gas Companies
Seaworld San Diego 1 Amusement & Theme Parks
Sharp Grossmont Hospital 1 Hospitals
Sharp Grossmont Rehab Center 1 Vocational Rehabilitation Services Sharp Mary Birch Hospital 1 Hospitals
Sharp Memorial Hospital 1 Hospitals
Sony Electronics Inc 1 Electronic Equipment & Supplies-Retail UC San Diego Health 2 Health Care Management
UCSD- Neural Computation 3 University-College Dept/Facility/Office University of California 3 University-College Dept/Facility/Office Univesity-Calfornia Sn Diego 3 Schools-Universities & College Academic VA San Diego Healthcare System 1 Hospitals
Source:
State of California- Employee Development Department- Major Employers in San Diego for 2023 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 2023
139
2014 2015 2016 2017 2018
Function/Program
General government
City Council 0.20 0.20 0.20 0.20 0.20
City Clerk 2.60 3.10 3.10 3.10 3.10
City Manager 1.74 2.05 2.05 1.80 1.90
Legal Services 0.25 0.25 0.25 0.25 0.25
Finance 3.80 3.55 3.55 3.55 3.45
Risk Mgt - Ins & Workers Comp - - - - -
Personnel/Human Resources 0.95 1.00 1.00 1.15 0.95
Info/Communication Systems 1.00 1.00 1.00 1.00 1.00
Community Development 5.40 6.00 6.00 5.80 5.80
Public Safety
Fire 19.95 19.95 19.95 19.95 20.20
Code Enforcement 1.75 1.80 1.80 1.80 1.80
Marine Safety 8.06 8.06 9.49 9.49 9.29
Junior Lifeguards 3.73 3.73 3.53 4.03 4.23
Public Works
Engineering 2.41 2.28 2.13 2.73 2.73
Environmental/Flood Control 1.10 1.10 1.10 1.05 1.05
Street Maintenance 2.90 2.95 2.95 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 0.90 0.90
Recreation 2.59 2.46 2.48 2.43 2.43
Sanitation 2.98 2.93 3.22 3.12 3.37
Improvement Districts 0.95 0.90 0.90 0.90 0.90
Redevelopment Agency 1.05 0.90 0.90 1.10 0.80
Solana Energy Alliance* - - - - -
Total Personnel 65.71 66.51 67.90 68.65 68.65
CITY OF SOLANA BEACH
Full-time-Equivalent City Government Employees by Function/Program Last Ten Fiscal Years
Fiscal Year
Source: City of Solana Beach's Annual Budget
Notes: A full-time employee is scheduled to work 2,080 hours per year (including vacation and sick leave). Full-time equivalent employment is calculated by dividing total labor hours by 2,080.
*Solana Energy Alliance (SEA) started operations in mid FY2018. The City of Solana Beach provided accounting services to SEA through FY2021
140
2019 2020 2021 2022 2023
Function/Program
General government
City Council 0.20 0.20 0.20 0.20 0.20
City Clerk 3.10 3.23 3.23 3.48 3.23
City Manager 1.90 2.48 2.48 2.58 2.58
Legal Services 0.25 0.25 0.25 0.25 0.25
Finance 3.05 3.30 3.70 3.35 3.35
Risk Mgt - Ins & Workers Comp - 1.20 1.20 1.20 1.20
Personnel/Human Resources 0.95 0.95 0.95 1.20 1.20
Info/Communication Systems 1.00 1.00 1.00 1.50 1.50
Community Development 5.80 6.00 7.00 6.00 6.00
Public Safety
Fire 20.20 20.20 20.20 20.20 20.20
Code Enforcement 1.80 1.80 1.80 1.80 1.80
Marine Safety 9.29 9.71 9.71 9.71 9.71
Junior Lifeguards 4.23 4.7 3.98 3.93 3.93
Public Works
Engineering 2.73 2.73 2.73 2.73 2.73
Environmental/Flood Control 1.05 1.05 1.05 1.20 1.20
Street Maintenance 2.95 2.95 2.95 2.95 2.95
Park Maintenance 1.35 1.35 1.25 1.35 1.35
Recreation & Community Services
Community Services 0.65 0.90 0.65 0.85 0.85
Recreation 2.38 2.43 2.33 2.50 2.45
Sanitation 3.37 3.37 3.37 3.67 3.67
Improvement Districts 0.90 0.90 0.90 0.95 0.95
Redevelopment Agency 0.80 0.80 0.14 0.24 0.24
Solana Energy Alliance* 0.75 0.75 0.75 - -
Total Personnel 68.70 72.25 71.82 71.84 71.54
CITY OF SOLANA BEACH
Full-time-Equivalent City Government Employees by Function/Program Last Ten Fiscal Years
Fiscal Year
*Solana Energy Alliance (SEA) started operations in mid FY2018. The City of Solana Beach provided accounting services to SEA through FY2021 Source: City of Solana Beach's Annual Budget
Notes: A full-time employee is scheduled to work 2,080 hours per year (including vacation and sick leave). Full-time equivalent employment is calculated by dividing total labor hours by 2,080.
141
2014 2015 2016 2017 2018
Function/Program
Community development
Number of:
Business licenses (A) 2,147 1,957 2,068 2,007 2,055
Plan checks (B) 276 275 304 284 319
Code violations (C) 1,467 1,016 1,240 1,124 2,513
Police (Calendar basis)
Number of calls for service (D) (E):
Priority 1 27 12 13 7 11
Priority 2 498 467 437 343 470
Priority 3 1,624 1,712 1,740 1,141 1,825
Priority 4 1,037 1,225 1,110 826 1,181
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 210 305 240 173 227
Fire
Emergency Responses 1,702 1,798 1,810 1,883 1,859
Training Hours 7,080 6,178 5,997 4,696 4,687
Plan Checks 92 289 380 390 375
Public works
Miles of:
Street resurfacing/repair 150000** 550000** 5.3* 1.7* 1.9 Street sweeping 900 900* 900* 900* 504
Number of:
Street signal maintained 192 192 192 192 192
Trees pruned per year 158 40 40 500 274
Recreation & community services
Number of enrollees:
Day camp (Calendar basis) 280 329 266 315 322
Classes (classes offered to san digueto adult
school) N/A 144 ***N/A ***N/A ***N/A
Mira Costa College Community Education, # of
students N/A N/A N/A N/A 720
Special events (attendees) 7,350 10,600 7,800 8,300 7,400 N/A - Data not available
(A) - Includes new & renewal licenses
(B) - Excludes temporary plan checks.
(C) - 2013 - 2019 are based on calendar year and include violations that did not result in a citation. 2020 - 2022 are fiscal year. These 3 fiscal years and future years only include violations in which citations were issued. (D) - Numbers adjusted and updated on CAFR FY16-17 for FY13-FY17 numbers to count only complete calls for service. (E) - 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
142
2019 2020 2021 2022 2023
2,345 2,677 2,677 1,608 1,853
319 399 399 483 699
2,656 8 - 155 177
9 2 9 12 13
209 159 207 281 233
167 117 143 160 154
1,154 1,109 1,337 1,478 1,301
247 226 337 345 274
147 287 212 164 163
703 619 832 831 834
- - - - -
- - - - -
139 117 231 246 219
1,792 1,792 1,495 1,569 1,469
6,350 6,350 6,375 7,053 6,374
375 375 436 452 490
3.8 1.0 0.8 1.1 5.3
504 504 504 504 504
192 192 192 192 192
280 280 280 280 280
315 312 290 303 294
***N/A ***N/A ***N/A ***N/A ***N/A
700 400 150 810 380
7,700 6,500 2,200 9,350 5,300
143
2013 2014 2015 2016
Function/Program
Public Safety
Code enforcement vehicles 2 2 2 2
Fire
Stations 1 1 1 1
Fire Engines 4 4 3 3
Fire Ladder Truck 1 1 1 1
Other vehicles 2 1 2 2
Public works
Streets (miles) 46 46 42 42
Street lights (city-owned) 748 748 527 527
Traffic signals 16 18 16 16
Public works vehicles 7 8 11 11
Public works Corporation Yard 1 1 1 1
Recreation & community service
Community centers 2 2 2 2
Parks 3 3 3 3
Marine Safety
Lifeguard Stations (Permanent)* 3 3 3 3
Lifeguard Stations (Temporary) N/A N/A N/A N/A
Vehicles 5 4 4 4
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
144
2017 2018 2019 2020 2021 2022 2023
2 2 2 2 2 2 2
1 1 1 1 1 1 1
3 3 2 2 2 2 2
1 1 1 1 1 1 1
2 2 3 3 3 3 3
42 42 42 42 42 42 42
527 525 525 525 525 525 525
16 16 16 16 16 16 16
12 8 8 8 8 8 8
1 1 1 1 1 1 1
2 2 2 2 2 2 2
3 2 2 2 2 2 2
6 6 3 3 3 3 3
N/A N/A 3 4 4 4 4
5 5 5 5 5 5 4
Fiscal Year
145
146
CITY OF SOLANA BEACH
635 S. Highway 101
Solana Beach , CA 92075
www.cityofsol a na beach .org
(858) 720-2460
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To the Honorable Mayor and Members of the City Council
City of Solana Beach, California
We have audited the financial statements of the City of Solana Beach (the City) as of and for the year ended June 30, 2023, and have issued our report thereon dated January 30, 2024. Professional standards require that we advise you of the following matters relating to our audit.
Our Responsibility in Relation to the Financial Statement Audit As communicated in our engagement letter dated May 23, 2023, our responsibility, as described by professional standards, is to form and express an opinion(s) about whether the financial statements that have been prepared by management with your oversight are presented fairly, in all material respects, in accordance with accounting principles generally accepted in the United States of America. Our audit of the financial statements does not relieve you or management of your respective responsibilities.
Our responsibility, as prescribed by professional standards, is to plan and perform our audit to obtain reasonable, rather than absolute, assurance about whether the financial statements are free of material misstatement. An audit of financial statements includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control over financial reporting.
Accordingly, as part of our audit, we considered the internal control of the City solely for the purpose of determining our audit procedures and not to provide any assurance concerning such internal control.
We are also responsible for communicating significant matters related to the audit that are, in our professional judgment, relevant to your responsibilities in overseeing the financial reporting process. However, we are not required to design procedures for the purpose of identifying other matters to communicate to you.
Planned Scope and Timing of the Audit
We conducted our audit consistent with the planned scope and timing we previously communicated to you.
Compliance with All Ethics Requirements Regarding Independence The engagement team, others in our firm, as appropriate, our firm, and our network firms have complied with all relevant ethical requirements regarding independence.
We identified self-review threats to independence as a result of non-attest services provided. Those non-attest services included the preparation of the financial statements and recording journal entries detected during the audit process.
To mitigate the risk, management has compared the draft financial statements and footnotes to the underlying accounting records to verify accuracy and has reviewed a disclosure checklist to ensure footnotes are complete and accurate. + DavisFarr
CERTIFIED PUBLIC ACCOUNTANTS
Davis Farr LLP
18201 Von Karman Avenue I Suite 1100 I Irvine, CA 92612 Main: 949.474.2020 I Fax: 949.263.5520
Additionally, we utilize a quality control reviewer to perform a second review of journal entries and the financial statements. We believe these safeguards are sufficient to reduce the independence threats to an acceptable level.
Significant Risks Identified
We have identified the following significant risks:
Implementation of the new Subscription Based IT Arrangements Accounting Standard. We reviewed the City’s inventory of IT arrangements and selected a sample of the agreements to test the calculations of the transactions. We ensured the City’s disclosure footnotes were accurate and complete in accordance with the new standard.
Compliance with Federal Grant Requirements. We reviewed the City’s schedule of federal expenses and selected major programs to test for compliance with federal grant requirements.
Qualitative Aspects of the Entity’s Significant Accounting Practices Significant Accounting Policies
Management has the responsibility to select and use appropriate accounting policies. A summary of the significant accounting policies adopted by the City is included in Note 1 to the financial statements. There have been no initial selection of accounting policies and no changes in significant accounting policies or their application during 2023. No matters have come to our attention that would require us, under professional standards, to inform you about (1) the methods used to account for significant unusual transactions and (2) the effect of significant accounting policies in controversial or emerging areas for which there is a lack of authoritative guidance or consensus.
Significant Accounting Estimates
Accounting estimates are an integral part of the financial statements prepared by management and are based on management’s current judgments. Those judgments are normally based on 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 markedly from management’s current judgments.
The most sensitive accounting estimates affecting the financial statements are:
Management’s estimate of the transactions related to net pension liabilities, net other post-employment benefits (OPEB), and claims liability are based on actuarial information. We evaluated the key factors and assumptions used to develop the amounts used by the actuaries and determined that they are reasonable in relation to the basic financial statements taken as a whole and in relation to the applicable opinion units.
Management’s estimate of revenue and expense accruals related federal grant programs. We evaluated the key factors and assumptions used to develop the amounts recorded as accruals and determined that they are reasonable in relation to the financial statements taken as a whole.
Financial Statement Disclosures
Certain financial statement disclosures involve significant judgment and are particularly sensitive because of their significance to financial statement users. The most sensitive disclosures affecting the City’s financial statements relate to 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 particular importance to users of the financial statements, particularly the City’s debtholders.
Significant Unusual Transactions
For purposes of this communication, professional standards require us to communicate to you significant unusual transactions identified during our audit. There were no unusual transactions noted as a result of our audit procedures.
Significant Difficulties Encountered during the Audit
We encountered no significant difficulties in dealing with management relating to the performance of the audit.
Uncorrected and Corrected Misstatements
For purposes of this communication, professional standards also require us to accumulate all known and likely misstatements identified during the audit, other than those that we believe are trivial, and communicate them to the appropriate level of management. Further, professional standards require us to also communicate the effect of uncorrected misstatements related to prior periods on the relevant classes of transactions, account balances or disclosures, and the financial statements as a whole and each applicable opinion unit.
There was one uncorrected financial statement misstatement to correct construction in progress and the related expense in the Sanitation Fund, whose effects in the current and prior periods, as determined by management, are immaterial, both individually and in the aggregate, to the financial statements taken as a whole. Uncorrected misstatements or matters underlying those uncorrected misstatements could potentially cause future-period financial statements to be materially misstated, even though the uncorrected misstatements are immaterial to the financial statements currently under audit.
In addition, professional standards require us to communicate to you all material, corrected misstatements that were brought to the attention of management as a result of our audit procedures. None of the misstatements identified by us as a result of our audit procedures and corrected by management were material, either individually or in the aggregate, to the financial statements taken as a whole or applicable opinion units.
Disagreements with Management
For purposes of this letter, professional standards define a disagreement with management as a matter, whether or not resolved to our satisfaction, concerning a financial accounting, reporting, or auditing matter, which could be significant to the City’s financial statements or the auditor’s report. No such disagreements arose during the course of the audit.
Representations Requested from Management
We have requested certain written representations from management in a letter dated January 30, 2024.
Management’s Consultations with Other Accountants
In some cases, management may decide to consult with other accountants about auditing and accounting matters. Management informed us that, and to our knowledge, there were no consultations with other accountants regarding auditing and accounting matters.
Other Significant Matters, Findings, or Issues
In the normal course of our professional association with the City, we generally discuss a variety of matters, including the application of accounting principles and auditing standards, significant events or transactions that occurred during the year, operating and regulatory conditions affecting the entity, and operational plans and strategies that may affect the risks of material misstatement. None of the matters discussed resulted in a condition to our retention as the City’s auditors.
Other Information Included in the Annual Comprehensive Financial Report Pursuant to professional standards, our responsibility as auditors for other information, whether financial or nonfinancial, included in the City’s annual report, does not extend beyond the information identified in the audit report, and we are not required to perform any procedures to corroborate such other information. However, in accordance with such standards, we have read the information and considered whether such information, or the manner of its presentation, was materially inconsistent with its presentation in the financial statements.
Our responsibility also includes communicating to you any information which we believe is a material misstatement of fact. Nothing came to our attention that caused us to believe that such information, or its manner of presentation, is materially inconsistent with the information, or manner of its presentation, appearing in the financial statements.
This report is intended solely for the information and use of the 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.
Irvine, California
January 30, 2024
CITY COUNCIL ACTION:
______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ AGENDA ITEM # C.2.
STAFF REPORT
CITY OF SOLANA BEACH
TO: Honorable Mayor and City Councilmembers
FROM: Daniel King, Interim City Manager
MEETING DATE: March 27, 2024
ORIGINATING DEPT: Engineering Department
SUBJECT: City Council Update Related to the La Colonia Master Plan and Consideration of Resolution 2024-015
Authorizing the City Manager to Execute an Amendment
to the Professional Services Agreement with Van Dyke
Landscape Architects
BACKGROUND:
In 2006, members of the City Council (Council) expressed interest in developing a plan for making improvements to La Colonia Park and Community Center. In July 2006, the Council established an Ad-Hoc Council Committee to work together with Staff, members of the Park and Recreation Commission and the community to develop recommendations for improving the park. The following month, the La Colonia Park Needs Assessment Advisory Committee (Advisory Committee) formed to develop recommendations.
In May 2007, the Advisory Committee’s recommendations were presented to Council and Council authorized the release of a request for qualifications (RFQ) for conceptual design services for La Colonia Park facility improvements. Upon completion of the RFQ process, Van Dyke Landscape Architects (VDLA) was selected to perform the required tasks for the park. An agreement with VDLA for conceptual design services for the La Colonia Park Project was executed in April 2008. VDLA developed three conceptual design options based on the needs assessment recommendations for community and Council review. A preferred alternative was selected in December 2008.
Since the preferred alternative was selected, three components of the La Colonia Master Plan (Master Plan) were designed and/or constructed as separate projects. Construction of the Veterans’ Honor Courtyard was completed in May 2016, construction of the La Colonia Skate Park was completed in April 2019 and construction is currently underway for the new tot lot playground.
March 27, 2024
La Colonia Master Plan Update – Amendment to PSA with VDLA