• The total revenues from all sources were $38,212,658. • The total cost of all City programs was $27,494,677.
• The General Fund reported an excess of revenues over expenditures and other financing sources and uses by $5,169,530.
• The General Fund’s actual resources received exceeded the final revenue budget by $2,852,588 while actual expenditures were $2,269,171 less than final budget before other financing sources and uses.
GASB Statements Regarding Pension Liabilities
Governmental Accounting Standards Board (GASB) requires government entities to report net pension liabilities in their Statement of Net Position. The standard, GASB Statement No. 68 (GASB 68), Accounting and Financial Reporting for Pensions, was issued by GASB on June 12, 2012.
Under GASB 68, governmental entities need to address net pension liability in their financial statements. Net pension liability refers to the difference between the total pension liability, defined as the present value of the projected benefit payments to employees based on past service, and the pension’s assets, generally considered to be the investments set aside to pay retirees and current employees. Since the City takes part in a cost-sharing plan, it needs to recognize its proportionate share of the collective net pension liability and expense for the plan.
GASB 68 also requires governments to immediately recognize annual service costs and interest on the pension liability, as well as the effects of any changes in benefit terms. Since pension expenses are now viewed over the service period of the plan member, governments also have to deal with how changes in economic and demographic assumptions used to project benefits affect the pension, as well as with differences between assumptions and actual experiences. Governmental entities also need to recognize, over a five-year period, the effects of differences between expected and actual investment returns.
As of June 30, 2024, the City of Solana Beach reported net pension liabilities for its proportionate shares of the net pension liability of each Plan as follows, with a comparison to the net pension liability of each Plan:
Proportionate Share of Net Pension Liability
FY 2024 FY 2023 Difference
Miscellaneous $ 7,863,579 $ 7,283,498 $580,081
Safety 13,127,102 12,151,239 975,863
$ 20,990,681 $ 19,434,737 $1,505,944
The City of Solana Beach’s net pension liability of each of the Plans is measured as of June 30, 2023, 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, 2022, rolled forward to June 30, 2023, using standard update procedures. The City’s proportion of the January 29,2025
FY 2024 ACFR
net pension liability was based on a projection of the City’s long-term share of contributions to the pension plans relative to the projected contributions of all participating employers, actuarially determined. The City’s net position as a percentage of the total pension liability (funded percentage) for both Plans as of June 30, 2024, is 76.21%.
More detailed information regarding the implementation of GASB 68 can be found in the following sections of the ACFR:
1. Note 5, City Employees Retirement Plan – Pension Plans, beginning on page 59
2. Schedule of Proportionate Share of the Net Pension Liability on pages 85 & 87
3. Schedule of Plan Contributions on pages 86 & 88
GASB Statements Regarding Other Post-Employment Benefits (OPEB) GASB Statement No. 75 (GASB 75), Accounting and Financial Reporting for PostEmployment Benefits other than Pensions is the “employer” reporting of the plan in its financial statements. The GASB 75 reports a liability in the ACFR on the statement of net position for the OPEB liability which is similar to how net pension liability is reported for pensions.
The primary objective of this statement was to improve accounting and financial reporting by state and local governments for post-employment benefits other than pensions (OPEB). It also improved information provided by state and local governmental employers about financial support for OPEB that is provided by other entities.
The City provides OPEB in the form of a modest retiree healthcare benefit. The City’s net OPEB liability was measured as of June 30, 2024, and the total OPEB liability used to calculate the net OPEB liability was determined by an actuarial valuation dated June 30, 2023, that was rolled forward to determine the June 30, 2024, total OPEB liability, based on the actuarial methods and assumptions as explained in Note 6 beginning on page 65 in the ACFR.
The total OPEB liability as of June 30, 2024, decreased by $260,636 to $3,413,755.
Combined with an increase of $276,037 in the Fiduciary Net Position (FNP), or monies held by the PARS Trust, the City’s Net OPEB Liability (NOL) realized a total decrease of $536,673 from FY 2023 to FY 2024 as shown in the following table:
Net OPEB Liability
6/30/2024 6/30/2023 Difference
Total OPEB Liability (TOL) $ 3,413,755 $ 3,674,391 $ (260,636) Fiduciary Net Position (FNP) 1,709,751 1,433,714 276,037 Net OPEB Liability (NOL) $ 1,704,004 $ 2,240,677 $ (536,673) Funded Status (FNP/TOL) 50.1% 39.0%
Discount Rate 5.50% 5.50%
January 29,2025
FY 2024 ACFR
More detailed information regarding the implementation of GASB 75 can be found in the following sections of the ACFR:
1. Note 6, Other Post-Employment Benefits, beginning on page 65
2. Schedule of Changes in Net OPEB Liability and Related Ratios on page 89
3. Schedule of Plan Contributions on page 90
Fund Balance
The GASB Statement No. 54 (GASB 54), Fund Balance and Governmental Fund Type Definitions, established Fund Balance classifications based largely upon the extent to which a government is bound to observe constraints imposed upon the use of the resources reported in governmental funds. The Governmental Fund statements conform with this classification and information regarding Fund Balances can be found in Note 11 on page 76 of the ACFR.
The loan balance from the Sanitation Fund is reported as a liability on the General Fund’s balance sheet as an “Advances from Other Funds”. The loan payable to the Sanitation fund was made at an annual interest rate of 2.78% for seven years with annual payments equal to $445,699. As payments are made each year to the Sanitation Fund, the loan amount will decrease and the Fund Balance amount in the Real Property Acquisition Fund will increase and eventually be zero when the loan is fully paid in FY 2026.
Fund Activity
General Fund
The General Fund had the following activity for FY 2024:
Total Revenues $ 35,741,477
Total Expenditures (26,521,947)
Other Financing Uses
(net)
(4,050,000)
Net Change in Fund Balance $ 5,169,530
Fund Balance
Beginning of Year 23,180,254
End of Year $ 28,349,784
Non-Spendable 41,024
Restricted 6,764,356
Committed 1,292,880
Assigned 6,786,980
Unassigned 13,464,544
Fund Balance-June 30, 2024 $ 28,349,784
January 29,2025
FY 2024 ACFR
The net change in the General Fund’s fund balance from FY 2023 to FY 2024 is $5,169,530 using the GASB 54 fund balance classifications as reflected in the following table:
06/30/24 06/30/23 Difference
Non-Spendable $ 41,024 $ 41,589 $ (565)
Restricted 6,764,356 5,003,450 1,760,906
Committed 1,292,880 1,292,880 0
Assigned 6,786,980 6,786,980 0
Subtotal 14,885,240 13,124,899 1,760,341
Unassigned
General Fund 14,145,260 11,146,575 2,998,685
Real Property Acquis (680,716) (1,091,220) 410,104
Total Unassigned 13,464,544 10,055,355 3,409,189
Total General Fund $ 28,349,784 $ 23,180,254 $ 5,169,530 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:
06/30/24 06/30/23 Difference
General Fund $ 14,985,836 $ 14,154,704 $ 831,132
Measure S Fund 1,864,578 1,192,079 672,499
Self-Insurance 203,597 203,597 0
Workers Comp 719,394 719,394 0
Asset Replacement 3,364,430 2,061,074 1,303,356
Facilities Replacement 924,228 733,095 191,133
OPEB 204,081 204,081 0
Pensions 6,764,356 5,003,450 1,760,906
Real Property Acquisition (680,716) (1,091,220) 410,504 Total General Fund $ 28,349,784 $ 23,180,254 $ 5,169,530 Other Governmental Funds
The Special Revenue Funds, Capital Improvement Funds, and Debt Service Funds had the following combined activity for FY 2024:
Total Revenues $ 5,833,933
Total Expenditures (6,393,737)
Other Financing Uses (net) 4,050,000
Net Change in Fund Balance $ 3,490,196
January 29,2025
FY 2024 ACFR
Fund Balance
Beginning of Year 18,085,152
End of Year $ 21,575,348
Non-Spendable
44,707
Restricted 21,641,962
Committed -
Assigned -
Unassigned (111,321)
Fund Balance-June 30, 2024 $ 21,575,348
The Proprietary Funds, which include Sanitation and Other Proprietary Funds, had the following activity for FY 2024 as shown in the following table:
Total Revenues $ 5,871,797
Total Expenditures (6,451,614)
Non-Operating Revenues 560,865
Non-Operating Expenditures (1,436,890)
Change in Net Position $ (1,455,842)
Net Position
Beginning of Year 51,043,753
End of Year $ 49,587,911
Net Position
Net Investment in Capital Assets 11,538,399
Restricted for Debt Service -
Unrestricted 38,049,512
Net Position-June 30, 2024 $ 49,587,911
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.
January 29,2025
FY 2024 ACFR
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 2024 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, 2023. Staff is confident that this report will again earn this distinction.
CEQA COMPLIANCE STATEMENT:
Not a project as defined by CEQA.
FISCAL IMPACT:
N/A
WORK PLAN:
N/A
OPTIONS:
• Approve Staff recommendation.
• Provide alternative direction.
CITY STAFF 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, 2023 – June 30, 2024.
2. Accept and file The Auditor’s Communication with Those Charged with Governance letter.
________________________
Alyssa Muto, City Manager
Attachments:
1. ACFR Fiscal Year Ended June 30, 2024
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, CA
ANNUAL COMPREHENSIVE
FINANCIAL REPORT
FOR THE YEAR ENDED
JUNE 30, 2024
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CITY OF SOLANA BEACH, CALIFORNIA
ANNUAL COMPREHENSIVE FINANCIAL REPORT
FOR THE YEAR ENDED JUNE 30, 2024
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, 2024
TABLE OF CONTENTS
INTRODUCTORY SECTION
Letter of Transmittal ................................................................................................................................ i GFOA Certificate of Achievement for Excellence in Financial Reporting ............................................... xi City of Solana Beach List of Officials and Advisory Bodies .................................................................. xii Organizational Chart ............................................................................................................................. xiii
FINANCIAL SECTION
Independent Auditor’s Report ................................................................................................................. 1 Management’s Discussion and Analysis ................................................................................................ 5 Basic Financial Statements:
Government-Wide Financial Statements:
Statement of Net Position .............................................................................................................. 19 Statement of Activities .................................................................................................................... 20 Fund Financial Statements:
Balance Sheet – Governmental Funds ....................................................................................... 26 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position ......................................................................................................................... 27 Statement of Revenues, Expenditures, and Changes in Fund Balances................................... 28 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities ................................... 29 Statement of Net Position – Proprietary Funds .......................................................................... 32 Statement of Revenues, Expenses, and Changes in Net Position – Proprietary Funds ............ 33 Statement of Cash Flows – Proprietary Funds ........................................................................... 34 Statement of Fiduciary Net Position – Fiduciary Funds.............................................................. 36 Statement of Changes in Fiduciary Net Position – Fiduciary Funds .......................................... 37 Notes to the Basic Financial Statements .......................................................................................... 41
REQUIRED SUPPLEMENTARY INFORMATION
Budgetary Comparison Schedule:
General Fund .................................................................................................................................... 84 Miscellaneous Employee Pension Plan:
Schedule of Proportionate Share of the Net Pension Liability......................................................... 85 Schedule of Employer’s Contributions ............................................................................................. 86 Safety Employees’ Pension Plan:
Schedule of Proportionate Share of the Net Pension Liability......................................................... 87 Schedule of Employer’s Contributions ............................................................................................. 88 Retiree Healthcare Plan:
Schedule of Changes in Net OPEB Liability and Related Ratios .................................................... 89 Schedule of Employer’s Contributions ............................................................................................. 90 Notes to the Required Supplementary Information .............................................................................. 91
CITY OF SOLANA BEACH, CALIFORNIA
ANNUAL COMPREHENSIVE FINANCIAL REPORT
FOR THE YEAR ENDED JUNE 30, 2024
TABLE OF CONTENTS
Page
SUPPLEMENTARY INFORMATION
COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES
Combining Balance Sheet – Nonmajor Governmental Funds ............................................................. 98 Combining Statement of Revenues, Expenditures and
Changes in Fund Balance – Nonmajor Governmental Funds ...................................................... 104 Budgetary Comparison Schedules:
Special Revenue Funds:
Gas Tax .................................................................................................................................... 110 TRANSNET ............................................................................................................................... 111 Municipal Improvements District ............................................................................................... 112 Lighting District ........................................................................................................................ 113 COPS ........................................................................................................................................ 114 Public Safety ............................................................................................................................. 115 Fire Mitigation ........................................................................................................................... 116 CDBG ........................................................................................................................................ 117 Coastal Area Business/Visitor Assistance and Enhancement ................................................. 118 Miscellaneous Grants ............................................................................................................... 119 Developer Pass-Thru ................................................................................................................ 120 Housing ..................................................................................................................................... 121 Camp Programs ........................................................................................................................ 122 SB1 Streets & Roads ................................................................................................................ 123 Capital Projects Funds
City CIP ..................................................................................................................................... 124 Sand Replenishment ................................................................................................................ 125 Debt Service Fund:
City Debt Service ...................................................................................................................... 126 Combining Statement of Fiduciary Net Position – All Custodial Funds.............................................. 128 Combining Statement of Changes in Fiduciary Net Position – All Custodial Funds ......................... 129
STATISTICAL SECTION
Net Position by Component ................................................................................................................ 132 Changes in Net Position ..................................................................................................................... 133 Fund Balances – Governmental Funds .............................................................................................. 134 Changes in Fund Balances – Governmental Funds........................................................................... 135 Assessed Value and Estimated Actual Value of Taxable Property .................................................... 136 Direct and Overlapping Property Tax Rates ....................................................................................... 137 Principal Property Taxpayers ............................................................................................................. 138 Property Tax Levies and Collections .................................................................................................. 139 Ratios of Outstanding Debt by Type .................................................................................................. 140 Direct and Overlapping Governmental Activities Debt ....................................................................... 141 Legal Debt Margin Information ........................................................................................................... 142
CITY OF SOLANA BEACH, CALIFORNIA
ANNUAL COMPREHENSIVE FINANCIAL REPORT
FOR THE YEAR ENDED JUNE 30, 2024
TABLE OF CONTENTS
STATISTICAL SECTION (continued)
Pledged Revenue Coverage .............................................................................................................. 143 Demographic and Economic Statistics ............................................................................................... 144 25 Major Employers – San Diego County .......................................................................................... 145 Full-Time-Equivalent City Employees by Function/Program .............................................................. 146 Operating Indicators by Function/Program ......................................................................................... 147 Capital Assets Statistics by Function/Program ................................................................................... 148
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i
CITY OF SOLANA BEACH FAX (858) 792-6513 / (858) 755-1782 635 SOUTH HIGHWAY 101 • SOLANA BEACH • CALIFORNIA 92075-2215 • (858) 720-2400 December 6, 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, 2024.
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. ii
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, 2024, 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, 2024, 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 12,675 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. iii
The City Council (Council) is comprised of four Council members elected within separate Council Districts to staggered four-year terms of office. The Mayor is elected at-large to a four-year term and the Deputy Mayor is selected 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.
iv
In addition to internal controls, the City maintains budgetary controls. The objective of these budgetary controls is to ensure compliance with legal provisions embodied in the annual appropriated budget approved by the Council. Activities of the General, Special Revenue, Debt Service, and Capital Projects Funds are included in the annual appropriated budget.
The budget is arranged by fund, function, and department and is presented to the Council by the City Manager and Finance Director. The budget is then adopted annually by the Council prior to the beginning of the financial year and serves as the foundation for the City’s financial planning and control. Department directors may make transfers of appropriations within their own budget units’ divisions 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 2025 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. Based on the most recent estimates from the Bureau of Economic Analysis, Real Gross Domestic Product (GDP) increased at an annual rate of 3.0% in the second quarter of 2024.
In July 2024, the U.S. Bureau of Labor Statistics (BLS) reported the Consumer Price Index for All Urban Consumers (CPI-U) increased 0.2% on a seasonally adjusted basis, after declining 0.1% in June.
The index for all items rose 2.9% over the past 12 months, ending July 2024, the smallest 12-month increase since March 2021.
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.
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 v
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 County unemployment rate was 4.9% in July 2024. The region’s unemployment rate remained lower than California’s unemployment rate of 5.8% in July 2024.
Solana Beach housing prices have started to decline. According to the San Diego Association of Realtors, the median single family home price in Solana Beach in August 2024 was $2.7 Million, compared to $3.2 Million the year prior. The San Diego region’s median home price was $1,055,000 in June 2024, an increase of 11.1% as compared to the same month in 2023.
In June 2024 Governor Gavin Newsom signed a $295.5 billion budget for the 2025 fiscal year, a decrease of 10% from the revised FY 2024 budget. The state budget includes a $211.5 Billion General Fund, a 5.2% decrease, as compared to the adopted FY 2024 budget appropriations. The largest increases were in Health & Human Services ($12.2 billion), Education K-12 ($11.5 billion) and Higher Education Expenditures ($2.2 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.
For FY 2025, 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.
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 goal. 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 Equipment Replacement Fund. Through the end of FY 2024, the balance in this fund is $3,013,836.
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 2024, the balance in this fund is $1,138,115.
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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 adopted by the Council on June 26, 2024, 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 value of investments. The total investment gain for all funds for the fiscal year ended June 30, 2024, was $2,799,903 ($1,226,651 investment income received plus $1,573,252 gain on the fair value), an increase of $2,111,813 from the prior fiscal year’s investment gain amount of $688,090 ($568,651 investment income received plus $119,439 gain on fair value).
City Work Plan – FY 2025
The Fiscal Year 2025 Work Plan is a guiding document that includes all of the City Council’s (Council) priority projects. This FY 2025 Work Plan focuses on four strategic priorities as the Council directs Staff on projects and programs: Community Character, Organizational Effectiveness, Environmental Sustainability and Fiscal Sustainability with the knowledge that all four areas of priority are important to the overall sustainability of the City.
On May 22, 2024, the Council held a public workshop to discuss the draft Fiscal Year 2024/2025 Work Plan and to accept public comments. At that public workshop, Council recommended changes to the draft Work Plan presented by City Staff. The revised Work Plan was then brought back to Council at the June 12, 2024, City Council meeting, where additional revisions were directed by the Council.
The revised final Fiscal Year 2025 Work Plan was brought back to Council for final consideration and was approved by the Council on June 26, 2024.
This Fiscal Year 2025 Work Plan will be added as a supplement item to our Fiscal Year 2024 Annual Comprehensive Financial Report to highlight the FY 2025 priorities and upcoming projects in greater detail.
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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.
Construction of the FY 2023/24 Annual Street Maintenance Program was completed in November 2024. Design of the FY 2024/25 Annual Street Maintenance Program will begin in February 2025 and is expected to be presented to the City Council for consideration in early spring 2025.
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 funding 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.
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, bikeability, and circulation along this key east-west arterial through the City of Solana Beach. With the variation in character along the corridor, the Project evaluated feasible improvements that address transportation improvements that integrate with the surrounding land use, activity centers and community character along the Corridor.
The Phase III design of the project was completed in November 2021. Phase III of the project viii
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 has prepared a stand-alone construction plan from Interstate 5 to Highland Drive, consistent with the available Federal funding that has been successfully awarded due to significant efforts by Congressman Levin’s office for this project. Staff is currently working on securing all the necessary permits from agencies such as SFID, SDG&E and Caltrans and expects to release the bid for proposals in early 2025.
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 and portable structures are necessary for seasonal needs and storage.
To continue with this task, a Professional Services Agreement with Domus Studios Architects (Domus) 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. Further refined versions of the Marine Safety Center were presented ix
to the City Council in February 2023, November 2023 and January 2024. 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.
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. The design team met with California Coastal Commission staff in August 2024 for a preliminary review of the refined above-ground version of the proposed Marine Safety Center. A second set of story poles were installed in September 2024 based on the January 2024 design shown below. The project will be moving into the final design phase in the spring of 2025 subject to the City Council’s approval of the preliminary design, and conclusion of the View Assessment process. A total of $1,500,000 was appropriated in the FY 2024 budget for design and engineering for the project.
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.
La Co lon ia Tot Lot -Addt' I Elements
~
ll· ffl
w ith Swale As-l s
Tug Rope
Climbing
Rocks r
Climbing
Boulder
Disc Swing
School Aged
Structures
2 Picnic Table
Preschool Structure
lAN~F
..,.,.
Red lines indicate required
equipment fall zones
Existing Swale
---Unchanged
x
Staff engaged 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.
Construction of the new La Colonia Tot Lot was completed in November 2024. With a portion of the construction contingency, additional work was completed within La Colonia Park as part of this project. This additional work included resurfacing the basketball court, purchasing a bench for the pickleball court and installing a new fence along the south end of the vacant lots. The total cost for construction of the Tot Lot was approximately $1,215,000. 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 also successfully submitted a grant application to the County of San Diego for the Neighborhood Reinvestment Program and was awarded $50,000. 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.
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, 2023. This was the twentysecond year in the past twenty-three 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.
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,
Alyssa Muto Rachel Jacobs
City Manager Finance Director/City Treasurer
Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Solana Beach
California
For its Annual Comprehensive
Financial Report
For the Fiscal Year Ended
June 30, 2023
Executive Director/CEO
e
CITY OF SOLANA BEACH
LIST OF OFFICIALS AND ADVISORY BODIES
June 30, 2024
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
ALYSSA MUTO
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
CITY OF SOLANA BEACH
Organizational Chart
Fiscal Year 2023-2024
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
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FINANCIAL SECTION
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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 ended June 30, 2024, 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, 2024, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our 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 information, 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
We have previously audited the City’s 2023 financial statements, and we expressed unmodified audit opinions on those audited financial statements in our report dated January 30, 2024. In our opinion, the summarized comparative information presented herein as of and for the year ended June 30, 2023 is consistent, in all material respects, with the audited financial statements from which it has been derived.
Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The combining and individual nonmajor fund financial statements and budgetary comparison schedules are presented for purposes of additional analysis and are not a required part of the basic financial statements.
The combining and individual nonmajor fund financial statements and budgetary comparison 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 comparison 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 December 6, 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
December 6, 2024
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4 MANAGEMENT’S DISCUSSION AND ANALYSIS
As management of the City of Solana Beach (City), we offer readers of the City’s financial statements this narrative overview and analysis of the financial activities of the City for the fiscal year ended June 30, 2024 (Fiscal Year (FY) 2024). 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 $122,236,676, or by $9,262,139, due to FY 2024 operations.
Governmental net position equaled $72,648,765.
The total revenues for all governmental activities were $38,212,658. The total expenditures for all governmental activities were $27,494,677. The General Fund reported an excess of revenues over expenditures and other financing sources and uses by $5,169,530.
The General Fund’s actual resources received exceeded the final revenue budget by $2,852,588 while actual expenditures were $2,269,171 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.
5 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. 6 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.
2024 2023 2024 2023 2024 2023
Assets:
$ 48,847,596 56,994,219 $ 50,791,169 $ 51,169,143 $ 107,785,388 $ 100,016,739 $ Capital assets, net 43,138,419 41,808,198 16,740,055 17,094,784 59,878,474 58,902,982 Total Assets 90,655,794 100,132,638 67,531,224 68,263,927 167,663,862 158,919,721 Deferred Outflows 7,501,590 8,005,746 934,413 646,308 8,436,003 8,652,054 Liabilities:
27,355,767 26,423,395 17,497,020 16,783,995 43,920,415 44,139,762 Other liabilities 7,537,687 7,582,795 1,112,464 937,802 8,650,151 8,520,597 Total Liabilities 34,938,562 33,961,082 18,609,484 17,721,797 52,570,566 52,660,359 Deferred Inflows 1,024,381 1,792,194 268,242 144,685 1,292,623 1,936,879 Net Position:
34,677,741 37,408,264 11,538,399 11,547,573 48,946,663 46,225,314 Restricted 27,017,802 21,964,017 - - 27,017,802 21,964,017 Unrestricted 8,222,699 5,289,026 38,049,512 39,496,180 46,272,211 44,785,206 Total Net Position $ 61,930,784 72,648,765 $ 49,587,911 $ 51,043,753 $ 122,236,676 $ 112,974,537 $ 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
7 The City’s combined net position for the fiscal year ended June 30, 2024, of $122,236,676. The City’s net position for governmental activities increased from $61,930,784 to $72,648,765. The following is an explanation of the governmental activity changes between fiscal years as shown in Table 1:
Current and other assets increased $8,146,623 or 16.7% primarily due to increased cash and investments.
Capital Assets net of depreciation increased $1,330,221 or 3.2% mainly due to Capital Asset purchases. More information is provided in Table 5.
Changes related to Business activities are as follows:
Capital Assets, net of depreciation decreased $354,729 or 2.1% primarily due to current year depreciation on existing assets. More information is provided in Table 5.
Governmental Activities
The cost of all Governmental activities in FY 2024 was $27,494,677 as shown on Tables 2 and
2.1. Of this cost, $3,992,269 was paid for by those who directly benefited from the programs; $2,282,195 was subsidized by grants received from other governmental organizations for both capital and operating activities; and $21,220,213 was financed through general City revenues. 2023 2023 2023
Revenues:
Program revenues:
Charges for services 3,992,269 $ 4,339,427 $ 5,737,058 $ 5,847,517 $ 9,729,327 $ 10,186,944 $ Operating grants
and contributions 2,115,123 3,172,914 - - 2,115,123 3,172,914 Capital grants
and contributions 167,072 8,465,943 - - 167,072 8,465,943 General revenues:
Property tax 12,352,534 11,638,632 - - 12,352,534 11,638,632 Sales & Use Tax 9,470,357 5,845,967 - - 9,470,357 5,845,967 Transient Tax 2,883,709 2,904,236 - - 2,883,709 2,904,236 Franchise Tax 857,126 897,472 - - 857,126 897,472
Motor VLF - unrestricted 2,194,459 2,053,486 - - 2,194,459 2,053,486 Use of Money and Property 2,435,453 783,458 560,865 149,640 2,996,318 933,098 Other 1,744,556 1,019,176 134,739 288,630 1,879,295 1,307,806 Total revenues 41,120,711 38,212,658 6,432,662 6,285,787 44,645,320 47,406,498 Expenses:
General government 5,858,330 4,490,903 - - 5,858,330 4,490,903 Public safety 13,129,413 11,414,093 - - 13,129,413 11,414,093 Public works 5,642,968 5,377,186 - - 5,642,968 5,377,186 Community Development 1,518,891 1,260,610 - - 1,518,891 1,260,610 Community Services 975,860 919,234 - - 975,860 919,234
Interest 369,215 385,479 - - 369,215 385,479
Sanitation - - 7,886,664 5,019,606 7,886,664 5,019,606
Solana Energy - - 1,840 19,229 1,840 19,229
Total expenses 23,847,505 27,494,677 7,888,504 5,038,835 35,383,181 28,886,340 Increase/(decrease)
in net position 17,273,206 10,717,981 (1,455,842) 1,246,952 9,262,139 18,520,158 Net position - July 1 44,657,578 61,930,784 51,043,753 49,796,801 112,974,537 94,454,379 Net position - June 30 $ 61,930,784 72,648,765 $ 49,587,911 $ 51,043,753 $ 122,236,676 $ 112,974,537 $ 2024 2024 2024
Table 2
City of Solana Beach Changes in Net Position
Governmental Business Total
Activities Activities
8 Items of significance within Table 2 are:
Revenues:
Operating and Capital grants and contributions decreased by 98% or $8,298,871 over the prior fiscal year amount mainly due to Sand Replenishment grant funds received in FY 2023.
Sales and Use Tax increased by 62% or $3,624,390 over the prior fiscal year due to the Measure S Tax being received for a full fiscal year.
Use of Money and Property increased by 221% or $2,063,220 over the prior fiscal year due to Interest Income and FMV Loss/Gain.
Expenses:
General Government expenses increased in FY 2024 by 30.4% or $1,367,427 from the prior fiscal year primarily due to changes in the City’s Pension and Other Pension Employee Benefits (OPEB) liabilities.
Public Safety expenses increased by 15.0% or $1,715,320 due to increased admin costs, OPEB liabilities, and equipment maintenance costs.
Sanitation expenses increased by 57.1% or $2,867,058 due to increased admin costs, increased SEJPA contributions, and equipment maintenance costs.
Fiscal Year 2024
Governmental Activities
(Graphic representation of Table 2 in percentages)
9 Sources of Revenue Program Expenses
Other5% Property Tax Comm Servces,
Investment Interest on 4%
Income 32% LT Debt, 1 %
4%
Capital General Govt,
Grants 0% 21%
Operating
Grants 6%
Pubic Safety ,
48%
Charges fo
Services
10%
6% Tax 25%
Franchise Devebpmnt, Tax 10% 6%
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 $100,143,442 consisting of a net position on July 1, 2024, of $61,930,784, program revenues of $6,274,464, and general revenues of $31,938,194. Total governmental activities during the year were $27,494,677, and as a result, net position increased by $10,717,981 to $72,648,765.
General government $ 5,858,330 $ 4,490,903 $ 1,175,137 $ 1,126,175 $ (4,683,193) $ (3,364,728) Public safety 13,129,413 11,414,093 856,636 881,452 (12,272,777) (10,532,641) Public works 5,642,968 5,377,186 1,733,794 3,191,868 (3,909,174) (2,185,318) Community development 1,518,891 1,260,610 1,731,566 10,064,991 212,675 8,804,381 Community services 975,860 919,234 777,331 713,798 (198,529) (205,436) Interest on long-term debt 369,215 385,479 - (369,215) - (385,479) Totals $ 27,494,677 $ 23,847,505 $ 6,274,464 $ 15,978,284 $ (21,220,213) $ (7,869,221) Table 2.1
Net Cost of Governmental Activities
Total Cost Program Net Cost
of Services Revenues of Services
2024 2023 2024 2023 2024 2023
10 15,000,000
10,000,000
5,000,000
(5,000,000)
(10,000,000)
(15,000,000)
Cost of Services, Program Revenues & Net Cost Governmental Activities
Comm
Gen Govt Public Safety Public Works Development Comm Services - •- -----
■ Cost of Services ■ Program Revenues ■ Net Cost
Interest
Business Type Activities
Net position of the Proprietary Fund (Business Type activities) on June 30, 2024, as reflected in Table 1, was $49,587,911. As shown in Table 3, amounts paid by users of the Sanitation system and other operating revenue were $5,737,058 while the cost of providing Sanitation Services in FY 2024 was $7,886,664 resulting in a change in net position of ($2,149,606). The total cost of providing Solana Energy Alliance services was $1,840 while program revenues totaled $0 resulting in a change in net position of ($1,840).
2024 2023 2024 2023 2024 2023
Sanitation 7,886,664 $ 5,019,606 $ $ 5,737,058 $ 5,846,765 $ 827,159 (2,149,606) $ Solana Energy Alliance 1,840 19,229 - 752 (1,840) (18,477) Total Business Activities $ 7,888,504 $ 5,038,835 $ 5,737,058 $ 5,847,517 $ 808,682 (2,151,446) $ of Services Revenue of Services
Table 3
Net Cost of Business Activities
Total Cost Program Net Cost
11 $10,000,000
$8,000,000
$6,000,000
$4,000,000
$2,000,000
$-
$(2,000,000)
$(4,000,000)
Cost of Services, Program Revenues & Net Cost
Business Activities
Fiscal Year 2024
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 $5,169,530 or 22.3% to $28,349,784 from July 1, 2023, to June 30, 2024. This was mainly due to a 62% increase ($3.6M) in sales tax revenues and 221% increase ($2.1M) in Use of Money and Property due to interest income.
General Fund Budgetary Highlights
Revenues:
Actual revenues received were above the final year-end budget by $2,852,588 or 5.1%. The largest variance was use of money and property with a $1.3 million positive variance due to the interest income from our Investment Accounts.
There was a significant revenue variance in the Miscellaneous Grants Fund due to the revenue budgeted for Lomas Santa Fe grant but project hasn’t been started yet.
Expenditures:
Actual expenditures incurred were lower than the final budget by $2,268,267 or 7.9%. The largest variance to budget was in Public Works which came in $421k 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 $947k. This was mainly the result of professional service savings in legal, information system, support services and building permit services.
Actual expenditures, in the Capital Projects City CIP fund, were $2 million lower than budgeted due to ongoing projects that will be completed in FY 25.
Actual expenditures, in the Miscellaneous Grants Fund, were $7 million lower than budgeted due to expenditure budgeted for Lomas Santa Fe project that hasn’t begun capital construction yet.
Revenues:
Taxes, Licenses, Fees
and Intergovernmental $ 27,622,696 $ 23,203,369 $- $ - $ 4,342,179 $ 14,116,261 $ 31,964,875 $ 37,319,630 Charges for Services 852,040 890,968 7,662 264,997 671,616 646,173 1,531,318 1,802,138 Other 7,266,741 4,782,932 202,352 337,228 610,124 173,771 8,079,217 5,293,931 - Total Revenues 28,877,269 35,741,477 210,014 602,225 5,623,919 14,936,205 41,575,410 44,415,699 - Expenditures: -
Current 25,308,430 24,214,339 20,196 1,517 2,943,979 2,347,088 28,272,605 26,562,944 Capital Outlay 1,178,321 177,735 1,553,935 1,146,827 1,480,148 9,427,849 4,212,404 10,752,411 Debt 35,196 46,300 - - 395,479 542,944 430,675 589,244 - Total Expenditures 24,438,374 26,521,947 1,574,131 1,148,344 4,819,606 12,317,881 32,915,684 37,904,599 - Net Transfers (1,440,131) (4,050,000) 4,050,000 2,841,916 - (1,401,785) - - - Net Change in -
Fund Balances $ 5,169,530 $ 2,998,764 $ 2,685,883 $ 2,295,797 $ 804,313 $ 1,216,539 $ 8,659,726 $ 6,511,100 2024 2023 2024 2023 2024 2023 2024 2023
Table 4
City of Solana Beach Governmental Funds
Changes in Fund Balances
General Fund Capital Projects Fund Other Governmental Total City CIP Funds 12 Ending Fund Balance: Ending Fund Balance for the year increased by 22.3% from FY 2023, for a total ending balance of $28,349,784. Included in the fund balance are non-spendable, restricted, committed, and assigned funds which total $14,885,240. The unassigned portion is the part of the fund balance that is available for use without constraints established by legal requirements and totals $13,464,544.
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, 2024, net capital assets of the governmental activities totaled $43,138,419 and the net capital assets of the business-type activities totaled $16,740,055. Depreciation of capital assets is recognized in government-wide financial statements. (See Table 5 below and Note 4 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, Lomas Santa Fe Drive Corridor Improvements, Marine Safety Center Renovations, and sewer pipeline improvements and replacement projects.
Debt
At year-end, the City had $7,136,388 in governmental type debt and $15,167,942 in proprietary debt (both net of any premiums or discounts) totaling $22,304,330. 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 $1,731 per capita as of June 30, 2024, which is a decrease of $99 from $1,830 on June 30, 2023.
See Table 6 below and Notes 9 through 10 to the financial statements for detailed descriptions. 2024 2023
Land $ 5,337,440 $ 5,337,440 $ 111,706 $ 111,706 $ 5,449,146 $ 5,449,146 Buildings 9,274,596 9,678,488 5,883,585 6,134,497 15,158,181 15,812,985 Equipment &
Vehicles 973,964 874,744 214,920 231,452 1,188,884 1,106,196 Infrastructure 24,182,159 15,135,078 10,529,844 10,554,309 34,712,003 25,689,387 Work in Progress 3,370,260 10,782,448 - 62,820 3,370,260 10,845,268 $ 43,138,419 $ 41,808,198 $ 16,740,055 $ 17,094,784 $ 59,878,474 $ 58,902,982 2024 2023 2024 2023
Table 5
City of Solana Beach Capital Assets at Year-End
(Net of Depreciation)
Governmental Business Total Activities Activities
13 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 decrease for FY 2025 by $1.9 million or 6.0%, as compared to the FY 2024 actual revenues. The primary decrease is related to conservatively budgeting for interest income and the FY24 actuals being higher than budgeted for Measure S Sales Tax.
General Fund expenditures are projected to decrease for FY 2025 by $1.6 million or 5.4% as compared to FY 2024 actual expenditures. This is due to one-time FY 2024 expenditures by Council to move projected surplus to CIP fund, PARS & OPEB Trust, Asset Replacement, and Facilities Replacement.
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
Loan Payable 230,155 $ 291,010 $ - $ - $ 230,155 $ 291,010 $ 2017 - SEJPA Loan Payable - - 9,902,500 10,147,500 9,902,500 10,147,500 2017 Wastewater Refunding Bond - - 4,895,000 5,215,000 4,895,000 5,215,000 TransNet Bond 5,500,000 5,500,000 - - 5,500,000 5,500,000 Bond premiums - - 306,656 332,211 306,656 332,211
Claims and judgements 780,015 838,000 - - 780,015 838,000 Compensated absences 626,218 670,497 63,786 71,680 690,004 742,177 $ 7,136,388 $ 7,299,507 $ 15,167,942 $ 15,766,391 $ 22,304,330 $ 23,065,898 2023
Table 6
City of Solana Beach Outstanding Debt at Year-End
Governmental Business Total Activities Activities
2024 2023 2024 2023 2024
14 BASIC FINANCIAL STATEMENTS
15 THIS PAGE INTENTIONALLY LEFT BLANK
16 GOVERNMENT-WIDE FINANCIAL STATEMENTS
17 THIS PAGE INTENTIONALLY LEFT BLANK
18 CITY OF SOLANA BEACH, CALIFORNIA
STATEMENT OF NET POSITION
JUNE 30, 2024
(WITH COMPARATIVE TOTALS FOR JUNE 30, 2023)
Governmental Business-Type
Activities Activities 2024 2023
ASSETS
Cash and investments (Note 3) $ 47,413,846 $ 12,759,631 $ 60,173,477 $ 53,453,025 Restricted cash and investments (Note 3) 6,764,356 - 6,764,356 5,003,450 Investment in joint venture (Note 13) - 36,743,833 36,743,833 37,054,566 Receivables:
Accounts, net 969,861 153,169 1,123,030 1,345,938
Interest 149,564 40,242 189,806 130,237
Intergovernmental 2,117,820 587,335 2,705,155 2,940,389 Internal balances (506,959) 506,959 - -
Inventories 44,707 - 44,707 47,545
Prepaid costs 41,024 - 41,024 41,589
Capital assets not being depreciated (Note 4) 8,707,700 111,706 8,819,406 16,294,414 Capital assets, net of accumulated depreciation (Note 4) 34,430,719 16,628,349 51,059,068 42,608,568 Total Assets 100,132,638 67,531,224 167,663,862 158,919,721
DEFERRED OUTFLOWS OF RESOURCES
Pension related (Note 5) 7,497,191 931,907 8,429,098 8,558,124 OPEB related (Note 6) 4,399 2,506 6,905 93,930
Total Deferred Outflows of Resources 7,501,590 934,413 8,436,003 8,652,054
LIABILITIES
Accounts payable 2,063,020 278,581 2,341,601 2,437,022
Accrued liabilities 414,298 27,785 442,083 324,158
Accrued interest payable - 196,098 196,098 204,236
Deposits payable 3,944,073 - 3,944,073 4,403,446
Unearned revenue 647,696 - 647,696 550,185
Noncurrent Liabilities:
Due within one year: bonds, loans,
claims, compensated absences (Note 9) 468,600 610,312 1,078,912 1,349,342 Due in more than one year:
Net pension liability (Note 5) 18,669,986 2,320,695 20,990,681 19,434,737 Net OPEB liability (Note 6) 1,085,621 618,383 1,704,004 2,240,677 Bonds, loans, claims,
compensated absences (Note 9) 6,667,788 14,557,630 21,225,418 21,716,556 Total Liabilities 33,961,082 18,609,484 52,570,566 52,660,359
DEFERRED INFLOWS OF RESOURCES
Pension related (Note 5) 707,951 87,999 795,950 1,474,160 OPEB related (Note 6) 316,430 180,243 496,673 462,719
Total Deferred Inflows of Resources 1,024,381 268,242 1,292,623 1,936,879
NET POSITION
Net investment in capital assets (Note 11) 37,408,264 11,538,399 48,946,663 46,225,314 Restricted:
Redevelopment activities 2,606,367 - 2,606,367 2,454,458 Public safety 1,208,303 - 1,208,303 1,122,185
Parks and recreation - - - 38,306
Public works 4,973,618 - 4,973,618 4,782,223
Capital projects 11,439,272 - 11,439,272 8,537,510
Debt service 25,886 - 25,886 25,885
Pensions 6,764,356 - 6,764,356 5,003,450
Unrestricted 8,222,699 38,049,512 46,272,211 44,785,206 Total Net Position $ 72,648,765 $ 49,587,911 $ 122,236,676 $ 112,974,537 Total
Primary Government
See Accompanying Notes to the Basic Financial Statements. 19 CITY OF SOLANA BEACH, CALIFORNIA
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2024
(WITH COMPARATIVE TOTALS FOR JUNE 30, 2023)
Operating Capital
Charges for Contributions Contributions
Expenses Services and Grants and Grants
Functions/Programs:
Primary Government:
Governmental Activities:
General government $ 5,858,330 $ 1,175,137 $ - $ -
Public safety 13,129,413 588,428 268,208 -
Community development 1,518,891 1,468,865 95,629 167,072 Community services 975,860 591,172 186,159 -
Public works 5,642,968 168,667 1,565,127 -
Interest 369,215 - - -
Total Governmental Activities 27,494,677 3,992,269 2,115,123 167,072 Business-Type Activities:
Sanitation Fund 7,886,664 5,737,058 - -
Solana Energy Alliance Fund 1,840 - - -
Total Business-Type Activities 7,888,504 5,737,058 - -
Total Primary Government $ 35,383,181 $ 9,729,327 $ 2,115,123 $ 167,072 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
Miscellaneous revenues
Total General Revenues
Change in Net Position
Net Position - Beginning
Net Position - Ending
Program Revenues
See Accompanying Notes to the Basic Financial Statem
20 ents.
Governmental Business-Type
Activities Activities 2024 2023
$ (4,683,193) $ - $ (4,683,193) $ (3,364,728)
(12,272,777) (12,272,777) (10,532,641) -
212,675 - 212,675 8,804,381
(198,529) - (198,529) (205,436)
(3,909,174) - (3,909,174) (2,185,318)
(369,215) - (369,215) (385,479)
(21,220,213) - (21,220,213) (7,869,221)
- (2,149,606) (2,149,606) 827,159
- (1,840) (1,840) (18,477)
- (2,151,446) (2,151,446) 808,682
(21,220,213) (2,151,446) (23,371,659) (7,060,539)
12,352,534 - 12,352,534 11,638,632
9,470,357 - 9,470,357 5,845,967
2,883,709 - 2,883,709 2,904,236
857,126 - 857,126 897,472
2,194,459 - 2,194,459 2,053,486
2,435,453 560,865 2,996,318 933,098
1,744,556 134,739 1,879,295 1,307,806
31,938,194 695,604 32,633,798 25,580,697
10,717,981 (1,455,842) 9,262,139 18,520,158
61,930,784 51,043,753 112,974,537 94,454,379
$ 72,648,765 $ 49,587,911 $ 122,236,676 $ 112,974,537
Net (Expense) Revenue and Changes in Net Position
Primary Government
Total
21 THIS PAGE INTENTIONALLY LEFT BLANK
22 FUND FINANCIAL STATEMENTS
Governmental Fund Financial Statements
Proprietary Fund Financial Statements
Fiduciary Fund Financial Statements
23 THIS PAGE INTENTIONALLY LEFT BLANK
24 GOVERNMENTAL FUND FINANCIAL STATEMENTS
25 CITY OF SOLANA BEACH, CALIFORNIA
BALANCE SHEET
GOVERNMENTAL FUNDS
JUNE 30, 2024
(WITH COMPARATIVE TOTALS FOR JUNE 30, 2023)
Capital
Projects Other
Fund Governmental
General City CIP Funds 2024 2023
ASSETS
Cash and investments $ 25,119,006 $ 9,559,813 $ 12,735,027 $ 47,413,846 $ 41,028,483 Restricted cash and investments 6,764,356 - - 6,764,356 5,003,450 Receivables:
Accounts 860,509 - 109,352 969,861 1,224,378
Accrued interest 106,468 9,001 34,095 149,564 100,188
Intergovernmental 1,815,016 - 302,804 2,117,820 2,135,538 Due from other funds (Note 12) 399,366 - - 399,366 600,791 Inventories - - 44,707 44,707 47,545
Prepaid costs 41,024 - - 41,024 41,589
Total Assets $ 35,105,745 $ 9,568,814 $ 13,225,985 $ 57,900,544 $ 50,181,962
LIABILITIES
Accounts payable $ 1,600,379 $ 192,200 $ 270,441 $ 2,063,020 $ 2,369,367 Accrued liabilities 354,777 - 59,521 414,298 259,192
Deposits payable 3,944,073 - - 3,944,073 4,403,446
Due to other funds (Note 12) - - 50,767 50,767 68,305
Advances from other funds (Note 12) 855,558 - - 855,558 1,266,061 Unearned revenues 1,174 - 646,522 647,696 550,185
Total Liabilities 6,755,961 192,200 1,027,251 7,975,412 8,916,556 FUND BALANCES (Note 11)
Nonspendable 41,024 - 44,707 85,731 89,134
Restricted 6,764,356 9,376,614 12,265,348 28,406,318 21,964,017 Committed 1,292,880 - - 1,292,880 1,292,880
Assigned 6,786,980 - - 6,786,980 6,786,980
Unassigned (Deficit) 13,464,544 - (111,321) 13,353,223 11,132,395 Total Fund Balances 28,349,784 9,376,614 12,198,734 49,925,132 41,265,406 Total Liabilities, Deferred Inflows of
Resources, and Fund Balances $ 35,105,745 $ 9,568,814 $ 13,225,985 $ 57,900,544 $ 50,181,962 Totals
See Accompanying Notes to the Basic Financial Statements. 26 CITY OF SOLANA BEACH, CALIFORNIA
RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF NET POSITION
JUNE 30, 2024
Total Fund Balances - Governmental Funds $ 49,925,132
Capital assets of $121,381,061, net of accumulated depreciation of $78,242,642, used in governmental activities are not financial resources and, therefore, are not reported in the funds. 43,138,419
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 7,497,191
Deferred outflows - OPEB related 4,399
Deferred inflows - pension related (707,951)
Deferred inflows - OPEB related (316,430)
Total Deferred Outflows and Inflows Related to Postemployment Benefits 6,477,209 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 (626,218)
Claims (780,015)
Loans payable (230,155)
Net OPEB liability (1,085,621)
Net pension liability (18,669,986)
Total Long-term Liabilities (26,891,995)
Net Position of Governmental Activities $ 72,648,765
Amounts reported for governmental activities in the Statement of Net Position are different because:
See Accompanying Notes to the Basic Financial Statements. 27 CITY OF SOLANA BEACH, CALIFORNIA
STATEMENT OF REVENUES,
EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2024
(WITH COMPARATIVE TOTALS FOR JUNE 30, 2023)
Capital
Projects Other
Fund Governmental
General City CIP Funds 2024 2023
REVENUES
Taxes and assessments $ 26,566,719 $ - $ 2,940,512 $ 29,507,231 $ 24,943,501 Licenses, permits and fees 815,647 - - 815,647 1,089,274 Intergovernmental 240,330 - 1,401,667 1,641,997 11,286,855 Charges for services 852,040 7,662 671,616 1,531,318 1,802,138 Use of money and property 1,825,425 113,932 496,098 2,435,455 783,458 Fines and forfeitures 528,722 - - 528,722 408,220
Other revenues 4,912,594 88,420 114,026 5,115,040 4,102,253 Total Revenues 35,741,477 210,014 5,623,919 41,575,410 44,415,699
EXPENDITURES
Current:
General government 7,309,390 - - 7,309,390 7,061,076
Public safety 12,534,729 - 1,075,351 13,610,080 12,708,776 Public works 3,072,649 20,196 1,606,057 4,698,902 4,324,397 Community development 1,522,980 - 139,698 1,662,678 1,625,027 Community services 868,682 - 122,873 991,555 843,668
Capital outlay 1,178,321 1,553,935 1,480,148 4,212,404 10,752,411 Debt service:
Principal retirement - - 60,855 60,855 203,808
Interest and fiscal charges 35,196 - 334,624 369,820 385,436 Total Expenditures 26,521,947 1,574,131 4,819,606 32,915,684 37,904,599 Excess (Deficiency) of Revenue
Over (Under) Expenditures 9,219,530 (1,364,117) 804,313 8,659,726 6,511,100
OTHER FINANCING SOURCES (USES)
Transfers in (Note 12) - 4,050,000 70,375 4,120,375 5,093,101 Transfers out (Note 12) (4,050,000) - (70,375) (4,120,375) (5,093,101) Total Other Financing Sources (Uses) (4,050,000) 4,050,000 - - - Net Change in Fund Balances 5,169,530 2,685,883 804,313 8,659,726 6,511,100 Fund Balances - Beginning 23,180,254 6,690,731 11,394,421 41,265,406 34,754,306 Fund Balances - Ending $ 28,349,784 $ 9,376,614 $ 12,198,734 $ 49,925,132 $ 41,265,406 Total Governmental Funds
See Accompanying Notes to the Basic Financial Statements. 28 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, 2024
Net Change in Fund Balances - Total Governmental Funds $ 8,659,726 Amounts reported for governmental activities in the Statement of Activities are different because:
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. 1,330,221
Bond and other debt proceeds provide current financial resources to governmental funds, but issuing debt increases long-term liabilities in the Statement of Net Position. Repayment of bond and other debt principal is an expenditure in the governmental funds, but repayment reduces long-term liabilities in the Statement of Net Position. Also, governmental funds report the effect of premiums, discounts, and similar items when debt is first issued, whereas these amounts are deferred and amortized in the Statement of Activities.
Principal paid on long-term liabilities 60,855
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.
Change in accrued interest on long-term debt 605
Compensated absences 44,279
Claims and judgments 57,985
Changes in pension liabilities and related deferred outflows and inflows of resources (452,576)
Changes in OPEB liabilities and related deferred outflows and inflows of resources 1,016,886
Total Expenses 667,179
Change in Net Position of Governmental Activities $ 10,717,981 See Accompanying Notes to the Basic Financial Statements. 29 THIS PAGE INTENTIONALLY LEFT BLANK
30 PROPRIETARY FUND FINANCIAL STATEMENTS
31 CITY OF SOLANA BEACH, CALIFORNIA
STATEMENT OF NET POSITION
PROPRIETARY FUNDS
JUNE 30, 2024
(WITH COMPARATIVE TOTALS FOR JUNE 30, 2023)
Solana Energy
Sanitation Fund Alliance Fund 2024 2023
ASSETS
Current Assets:
Cash and investments (Note 3) $ 12,759,069 $ 562 $ 12,759,631 $ 12,424,542 Receivables:
Accounts 96,755 56,414 153,169 121,560
Interest 40,242 - 40,242 30,049
Intergovernmental 583,335 4,000 587,335 804,851
Total Current Assets 13,479,401 60,976 13,540,377 13,381,002 Noncurrent Assets:
Advances to other funds (Note 12) 855,558 - 855,558 1,266,061 Investment in joint venture 36,743,833 - 36,743,833 37,054,566 Capital assets not being depreciated (Note 4) 111,706 - 111,706 174,526 Capital assets, net of accumulated depreciation (Note 4) 16,628,349 - 16,628,349 16,920,258 Total Noncurrent Assets 54,339,446 - 54,339,446 55,415,411 Total Assets 67,818,847 60,976 67,879,823 68,796,413
DEFERRED OUTFLOWS OF RESOURCES
Pension related 931,907 - 931,907 639,292
OPEB related 2,506 - 2,506 7,016
Total Deferred Outflows of Resources 934,413 - 934,413 646,308
LIABILITIES
Current Liabilities:
Accounts payable 278,581 - 278,581 67,655
Accrued liabilities 26,428 1,357 27,785 64,966
Compensated absences (Note 9) 25,312 - 25,312 36,550
Accrued interest payable 196,098 - 196,098 203,631
Due to other funds (Note 12) - 348,599 348,599 532,486
Loans and bonds payable - current (Note 9) 585,000 - 585,000 565,000 Total Current Liabilities 1,111,419 349,956 1,461,375 1,470,288 Noncurrent Liabilities:
Compensated absences (Note 9) 38,474 - 38,474 35,130
Loans and bonds payable (Note 9) 14,519,156 - 14,519,156 15,129,711 Net pension liability 2,320,695 - 2,320,695 1,451,775
Net OPEB liability 618,383 - 618,383 167,379
Total Noncurrent Liabilities 17,496,708 - 17,496,708 16,783,995 Total Liabilities 18,608,127 349,956 18,958,083 18,254,283
DEFERRED INFLOWS OF RESOURCES
Pension related 87,999 - 87,999 110,120
OPEB related 180,243 - 180,243 34,565 -
Total Deferred Inflows of Resources 268,242 - 268,242 144,685
NET POSITION
Net investment in capital assets (Note 11) 11,538,399 - 11,538,399 11,547,573 Unrestricted (Deficit) 38,338,492 (288,980) 38,049,512 39,496,180 Total Net Position (Deficit) $ 49,876,891 $ (288,980) $ 49,587,911 $ 51,043,753 Total Proprietary Funds
See Accompanying Notes to the Basic Financial Statements. 32 CITY OF SOLANA BEACH, CALIFORNIA
STATEMENT OF REVENUES, EXPENSES
AND CHANGES IN FUND NET POSITION
PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2024
(WITH COMPARATIVE TOTALS FOR JUNE 30, 2023)
Sanitation Solana Energy
Fund Alliance Fund 2024 2023
OPERATING REVENUES
Charges for services $ 5,737,058 $ - $ 5,737,058 $ 5,847,517 Miscellaneous revenue 74,033 60,706 134,739 288,630
Total Operating Revenues 5,811,091 60,706 5,871,797 6,136,147
OPERATING EXPENSES
Cost of sales and services 3,581,018 360 3,581,378 2,199,514 Administration 2,308,510 1,480 2,309,990 1,095,858
Depreciation 560,246 - 560,246 554,480
Total Operating Expenses 6,449,774 1,840 6,451,614 3,849,852 Operating Income (Loss) (638,683) 58,866 (579,817) 2,286,295
NONOPERATING REVENUES (EXPENSES)
Interest income 549,422 11,443 560,865 149,640
Interest expense (577,500) - (577,500) (598,127)
Share in joint venture net gain/(loss) (859,390) - (859,390) (590,856) Total Nonoperating Revenues (Expenses) (887,468) 11,443 (876,025) (1,039,343) Change in Net Position (1,526,151) 70,309 (1,455,842) 1,246,952 Net Position - Beginning (Deficit) 51,403,042 (359,289) 51,043,753 49,796,801 Net Position - Ending (Deficit) $ 49,876,891 $ (288,980) $ 49,587,911 $ 51,043,753 Total Proprietary Funds
See Accompanying Notes to the Basic Financial Statements. 33 CITY OF SOLANA BEACH, CALIFORNIA
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2024
(WITH COMPARATIVE TOTALS FOR JUNE 30, 2023)
Sanitation Solana Energy
Fund Alliance Fund 2024 2023
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers $ 5,839,766 $ 217,938 $ 6,057,704 $ 6,551,782 Payments to suppliers and service providers (3,364,182) (43,452) (3,407,634) (2,241,752) Payments to employees for salaries and benefits (1,161,028) (1,480) (1,162,508) (876,367) Net Cash Provided by (Used for) Operating Activities 1,314,556 173,006 1,487,562 3,433,663
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Repayment received from capital-related interfund borrowings 410,503 - 410,503 399,399 Advances made for capital-related interfund borrowings - (183,887) (183,887) (158,456) Acquisition and construction of capital assets (205,516) - (205,516) (115,310) Principal paid on capital debt (565,000) - (565,000) (542,500) Interest paid on capital debt (610,588) - (610,588) (630,124) Net Cash Provided by (Used for) Capital and Related Financing Activities (970,601) (183,887) (1,154,488) (1,046,991)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest on investments 539,229 11,443 550,672 121,383
Investment in joint venture (548,657) - (548,657) (1,184,744) Net Cash Provided by (Used for) Investing Activities (9,428) 11,443 2,015 (1,063,361) Net Increase (Decrease) in Cash and Cash Equivalents 334,527 562 335,089 1,323,311 Cash and Cash Equivalents - Beginning 12,424,542 - 12,424,542 11,101,231 Cash and Cash Equivalents - Ending $ 12,759,069 $ 562 $ 12,759,631 $ 12,424,542 Reconciliation of Operating Income (Loss) to Net Cash Provided by (Used for) Operating Activities:
Operating income (loss) $ (638,683) $ 58,866 (579,817) $ 2,286,295 Adjustments to Reconcile Operating Income (Loss) to
Net Cash Provided by (Used for) Operating Activities:
Depreciation expense 560,246 - 560,246 554,480
(Increase) decrease in accounts receivable (31,966) 357 (31,609) 275,133 (Increase) decrease in intergovernmental receivables 60,641 156,875 217,516 140,502 (Increase) decrease in pension related deferred outflows of resources (292,615) - (292,615) (449,427) (Increase) decrease in OPEB related deferred outflows of resources 4,510 - 4,510 3,738 Increase (decrease) in accounts payable 211,105 (180) 210,925 (44,443) Increase (decrease) in accrued liabilities 5,731 (42,912) (37,181) 2,205 Increase (decrease) in compensated absences (7,894) - (7,894) 19,231 Increase (decrease) in net pension liability 868,920 - 868,920 983,494 Increase (decrease) in net OPEB liability 451,004 - 451,004 (13,110) Increase (decrease) in pension related deferred inflows of resources (22,121) - (22,121) (302,953) Increase (decrease) in OPEB related deferred inflows of resources 145,678 - 145,678 (21,482) Total Adjustments 1,953,239 114,140 2,067,379 1,147,368 Net Cash Provided by (Used for) Operating Activities $ 1,314,556 $ 173,006 $ 1,487,562 $ 3,433,663 Schedule of Non-Cash Investing, Capital, and Financing Activities:
Amortization of bonds premium/discount $ 25,555 $ - $ 25,555 $ 25,555 Total Proprietary Funds
See Accompanying Notes to the Basic Financial Statements. 34 FIDUCIARY FUND FINANCIAL STATEMENTS
35 CITY OF SOLANA BEACH, CALIFORNIA
STATEMENT OF FIDUCIARY NET POSITION
FIDUCIARY FUNDS
JUNE 30, 2024
Pension (and Other
Employee Benefit) Private-Purpose
Trust Fund Trust Fund
OPEB Successor Agency
Trust Fund of the Former RDA Custodial Funds
ASSETS
Cash and cash equivalents (Note 3) $ - $ 79,348 $ 324,642 Investments (Note 3):
Exchange traded funds 1,961,374 - 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:
Due from other governments - - 810
Total Assets 1,961,374 79,348 577,649
LIABILITIES
Accounts payable - - 1,664
Accrued liabilities - 992 -
Accrued interest - 5,327 -
Long-term liabilities:
Due in one year (Note 15) - 138,200 -
Due in more than one year (Note 15) - 1,764,200 -
Total Liabilities - 1,908,719 1,664
NET POSITION
Restricted for:
Postemployment benefits other than pensions 1,961,374 - - Individuals, organizations, and other governments - (1,829,371) 575,985 Total Net Position $ 1,961,374 $ (1,829,371) $ 575,985
See Accompanying Notes to the Basic Financial Statements. 36 CITY OF SOLANA BEACH, CALIFORNIA
STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
FIDUCIARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2024
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 $ 342,342 $ - $ -
Investment earnings 186,194 690 11,949
Property taxes - 267,466 -
Special assessment collections - - 220,046
Other revenues - - 33,703
Total Additions 528,536 268,156 265,698
DEDUCTIONS
Administrative expenses - 53,613 -
Contractual services 9,937 - 8,833
Principal expense - - 100,000
Interest expense - 66,568 97,492
Total Deductions 9,937 120,181 206,325
Net Increase (Decrease) in Fiduciary Net Position 518,599 147,975 59,373 Net Position (Deficit) - Beginning 1,442,775 (1,977,346) 516,612 Net Position (Deficit) - Ending $ 1,961,374 $ (1,829,371) $ 575,985 See Accompanying Notes to the Basic Financial Statements. 37 THIS PAGE INTENTIONALLY LEFT BLANK
38 NOTES TO THE BASIC
FINANCIAL STATEMENTS
39 THIS PAGE INTENTIONALLY LEFT BLANK
40 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2024
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.
41 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO THE BASIC FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2024
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.
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. 42 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO THE BASIC FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2024
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 funds:
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.
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. 43 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO THE BASIC FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2024
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 funds:
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.
44 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO THE BASIC FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2024
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, pensions, OPEB, and for the 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. 45 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO THE BASIC FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2024
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
46 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO THE BASIC FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2024
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 City reports two other items that qualify for reporting in this category which are the deferred inflows related to the pensions and 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. i. Compensated Absences
Government-Wide Financial Statements
For governmental activities, compensated absences are recorded as incurred and the related expenses and liabilities are reported.
47 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO THE BASIC FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2024
Note 1: Summary of Significant Accounting Policies (Continued) 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, 2022
Measurement Date June 30, 2023
Measurement Period July 1, 2022 to June 30, 2023
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. 48 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO THE BASIC FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2024
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, 2023
Measurement Date June 30, 2024
Measurement Period July 1, 2023 to June 30, 2024
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
7.9 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.
49 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO THE BASIC FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2024
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.
50 I
CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO THE BASIC FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2024
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.
51 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO THE BASIC FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2024
Note 2: Stewardship, Compliance, and Accountability
a. Excess of Expenditures over Appropriations
On June 30, 2024, no funds reported expenditures exceeding appropriations. b. Deficit Fund Equity
At June 30, 2024, the following nonmajor funds reported a deficit fund balance:
The deficit for the CDBG fund is due to the timing of reimbursements and revenues for its activities, and the Camp Program fund deficit was planned based on adopted budgets and both deficits are expected to be eliminated through future revenues and cost allocations. 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, 2024.
Note 3: Cash and Investments
The following is a summary of pooled cash and investments and restricted cash and investments at June 30, 2024:
Nonmajor Fund Name Classification Deficit
CDBG Special Revenue Fund $ 16,737
Camp Programs Fund Special Revenue Fund 49,877
Fiduciary
Funds
Governmental Business-Type Statement of
Activities Activities Net Position Total
Cash and investments $ 47,413,846 $ 12,759,631 $ 403,990 $ 60,577,467 Restricted cash and investments 6,764,356 - 2,213,571 8,977,927 Total $ 54,178,202 $ 12,759,631 $ 2,617,561 $ 69,555,394 Government-Wide Statement of
Net Position
52 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO THE BASIC FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2024
Note 3: Cash and Investments (Continued)
Cash and investments consisted of the following at June 30, 2024:
a. Cash Deposits
The carrying amounts of the City’s cash deposits were $12,059,471 at June 30, 2024.
Bank balances were $14,113,092 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 $2,053,621 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 fair 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, 2024, none of the City’s deposits with financial institutions in excess of federal depository insurance limits were held in uncollateralized accounts.
Cash and cash equivalents:
Cash on hand $ 19,462
Demand deposits 12,059,471
Total cash and cash equivalents 12,078,933
Investments:
Local Agency Investment Fund 16,757,598
United States Treasury 13,966,782
Federal Home Loan Bank 4,018,989
Federal Farm Credit Bank 3,875,100
Federal National Mortgage Association 474,050
Medium Term Notes 5,993,691
Money Market Funds 26,041
Supranationals 1,224,664
Asset Backed Securities 2,413,827
Total investments 48,750,742
Restricted investments (Section 115 Trust):
Equity Mutual Fund 8,479,569
Fixed Income Mutual Fund 246,150
Total restricted investments 8,725,719
Total cash and investments $ 69,555,394
53 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO THE BASIC FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2024
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 on the following page 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 the 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. 54 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO THE BASIC FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2024
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
Section 115 Trust
The City has set up an IRS Section 115 Trust for the purpose of setting funding aside for the unfunded pension liability. The Trust is currently invested in money market, equity, bond, and exchange-traded funds, and at June 30, 2024, the fair value of the assets held in trust is $8,725,719. The assets of the trust are reported as restricted cash and investments in the City’s General Fund, with a corresponding restriction in the General Fund’s fund balance.
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 fair 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. 55 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2024
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 in 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, 2024, for each investment type.
12 Months 13 to 24 25 to 60
Fair Value or Less Months Months
Local Agency Investment Fund 16, $ 757,598 $ 16,757,598 $ - $ - U.S. Treasury 13,966,782 5,806,483 5,705,570 2,454,729
U.S. Government Agency Securities:
Federal Home Loan Bank 4,018,989 391,888 1,350,069 2,277,032 Federal Farm Credit Bank 3,875,100 691,134 916,381 2,267,585 Federal National Mortgage Association 474,050 - 474,050 - Medium-term Notes 5,993,691 1,833,074 4,160,617 -
Money Market Mutual Funds 26,041 26,041 - -
Supranationals 1,224,664 430,137 312,757 481,770
Asset Backed Securities 2, 413,827 265,167 1,089,468 1,059,192 Investments Held in Section 115 Trust:
Equity Mutual Fund 8,479,569 8,479,569 - -
Fixed Income Mutual Fund 246,150 246,150 - -
$ 57,476,461 $ 34,927,241 $ 14,008,912 $ 8,540,308
Investments
Remaining Investment Maturities
Total as of Minimum
June 30, 2024 Legal Rating AAA AA+/Aa1 A Not Rated
Local Agency Investment Fund $ 16,757,598 N/A - $ $ - $ - $ 16,757,598 U.S. Treasury * 13,966,782 N/A - - - 13,966,782
U.S. Government Agency Securities:
Federal Home Loan Bank 4,018,989 N/A 4,018,989 - - -
Federal Farm Credit Bank 3, 875,100 N/A 3,875,100 - - - Federal National Mortgage Association 474,050 N/A 474,050 - - - Medium-term Notes 5, 993,691 A 241,260 773,407 4,979,024 - Money Market Mutual Funds 26,041 AAA 26,041 - - -
Supranationals 1,224,664 AA 1,224,664 - - -
Asset Backed Securities 2,413,827 AA 2,413,827 - - -
Investments Held in Section 115 Trust:
Equity Mutual Fund 8, 479,569 N/A - - - 8,479,569
Fixed Income Mutual Fund 246,150 N/A - - - 246,150
$ 57,476,461 $ 12,273,931 $ 773,407 $ 4,979,024 $ 39,450,099 * Exempt from rating disclosure
Investments
56 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO THE BASIC FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2024
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 investments in the US Government Agency issuers which held more than 5% of the investment portfolio are as follows:
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, 2024:
Issuer Investment Type Fair Value
Federal Home Loan Bank U.S. Government Agency Securities $ 4,018,989 Federal Farm Credit Bank U.S. Government Agency Securities 3,875,100 Level 1 Level 2 Uncategorized Total
Local Agency Investment Fund $ - $ - $ 16,757,598 $ 16,757,598 U.S. Treasury 13,966,782 - - 13,966,782
U.S. Government Agency Securities - 8,368,139 - 8,368,139 Medium-term Notes - 5,993,691 - 5,993,691
Supranationals - 1,224,664 - 1,224,664
Asset Backed Securities - 2,413,827 - 2,413,827
Equity Mutual Fund 8,479,569 - - 8,479,569
Fixed Income Mutual Fund 246,150 - - 246,150
Money Market Mutual Funds - - 26,041 26,041
Total $ 22,692,501 $ 18,000,321 $ 16,783,639 $ 57,476,461 57 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO THE BASIC FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2024
Note 4: Capital Assets
The following is a summary of changes in capital assets for governmental activities for the year ended June 30, 2024:
Governmental activities depreciation expense for capital assets for the year ended June 30, 2024, is as follows:
Balance Balance
June 30, 2023 Additions Deletions June 30, 2024
Governmental Activities
Non-Depreciable Assets:
Land $ 5,337,440 $ - $ - $ 5,337,440
Construction in progress 10,782,448 3,101,654 (10,513,842) 3,370,260 Total non-depreciable assets 16,119,888 3,101,654 (10,513,842) 8,707,700 Depreciable Assets:
Buildings 6,014,902 - - 6,014,902
Improvements 14,186,166 206,756 - 14,392,922
Equipment 2,925,993 376,235 - 3,302,228
Vehicles 2,359,744 178,119 - 2,537,863
Infrastructure 75,745,019 10,680,427 - 86,425,446
Total depreciable assets 101,231,824 11,441,537 - 112,673,361 Less Accumulated Depreciation:
Buildings (3,481,107) (120,725) - (3,601,832)
Improvements (7,041,473) (489,923) - (7,531,396)
Equipment (2,472,193) (292,872) - (2,765,065)
Vehicles (1,938,800) (162,262) - (2,101,062)
Infrastructure (60,609,941) (1,633,346) - (62,243,287)
Total accumulated depreciation (75,543,514) (2,699,128) - (78,242,642) Total depreciable assets, net 25,688,310 8,742,409 - 34,430,719 Total capital assets, net $ 41,808,198 $ 11,844,063 $ (10,513,842) $ 43,138,419 General Government 247,150$
Public Safety 332,568
Public Works 1,685,835
Community Development 5,774
Community Services 427,801
Total Depreciation Expense $ 2,699,128
58 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2024
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, 2024:
Business-type activities depreciation expense for capital assets for the year ended June 30, 2024, is $560,246, 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, 2023 Additions Deletions June 30, 2024
Business-Type Activities
Non-Depreciable Assets:
Land 111, $ 706 $ - $ - $ 111,706
Construction in progress 62,820 - (62,820) -
Total non-depreciable assets 174,526 - (62,820) 111,706 Depreciable Assets:
Buildings 6,766,498 - - 6,766,498
Improvements 18,632,262 268,337 - 18,900,599
Equipment 828,705 - - 828,705
-
Total depreciable assets 26,227,465 268,337 - 26,495,802 Less Accumulated Depreciation:
Buildings (757,457) (125,456) - (882,913)
Improvements (7,952,497) (418,258) - (8,370,755)
Equipment (597,253) (16,532) - (613,785)
Total accumulated depreciation (9,307,207) (560,246) - (9,867,453) Total depreciable assets, net 16,920,258 (291,909) - 16,628,349 Total capital assets, net $ 17,094,784 $ (291,909) $ (62,820) $ 16,740,055 59 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO THE BASIC FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2024
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 fulltime 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 costof-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, 2024, 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, 2024, the contributions recognized as a reduction to the net pension liability was $2,195,332.
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 14.06% .10.10% 7.68% 27.11% 19.95% 13.54% 27.11% 19.95% 13.54% Required Employee
Contribution Rates 7.96% 6.93% 7.75% 8.99% 8.96% 13.75% 8.99% 8.96% 13.75% * Closed to new member entrants.
60 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2024
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, 2024, 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, 2023, 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, 2022 rolled forward to June 30, 2023 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, 2022 and 2023, respectively, was as follows:
For the year ended June 30, 2024, the City recognized pension expense as follows:
Proportionate Share of
Net Pension Liability
Miscellaneous $ 7,863,579
Safety 13,127,102
Total $ 20,990,681
Miscellaneous Safety Combined
Proportion - June 30, 2022 0.15566% 0.17683% 0.16825%
Proportion - June 30, 2023 0.15726% 0.17562% 0.16826%
Change 0.00160% -0.00121% 0.00001%
Miscellaneous Safety Total Plans
$ 1,274,233 $ 2,040,041 $ 3,314,274
61 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2024
Note 5: City Employees Retirement Plan - Pension Plans (Continued) At June 30, 2024, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:
The $2,307,513 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, 2025. 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 $ 940,970 $ - Changes of assumptions 474,760 -
Difference between expected and actual experience 401,714 62,316 Net difference between projected and actual earnings on plan investments 1,273,186 -
Differences between actual contributions and the
proportionate share of contributions 14,941 150,527
Change in employer's proportion 55,083 93,807
Total Miscellaneous Plan 3,160,654 306,650
Safety Plan
Pension contributions subsequent to measurement date 1,366,543 - Changes in assumptions 766,115 -
Difference between expected and actual experience 963,771 82,509 Net difference between projected and actual earnings on plan investments 1,796,440 -
Differences between actual contributions and the
proportionate share of contributions 118,765 406,791
Change in employer's proportion 256,810 -
Total Safety Plan 5,268,444 489,300
Total All Plans $ 8,429,098 $ 795,950
Miscellaneous Plan
Fiscal
Year Ended Miscellaneous Safety
June 30, Plan Plan Total
2025 523,420$ $ 1,091,005 $ 1,614,425
2026 372,365 786,652 1,159,017
2027 980,715 1,484,803 2,465,518
2028 36,534 50,141 86,675
$ 1,913,034 $ 3,412,601 $ 5,325,635
Deferred Outflows/(Inflows) of Resources
62 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO THE BASIC FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2024
Note 5: City Employees Retirement Plan - Pension Plans (Continued) c. Actuarial Methods and Assumptions
Actuarial Assumptions
For the measurement period ended June 30, 2023 (the measurement date), the total pension liability was determined by rolling forward the June 30, 2022 total pension liability.
The June 30, 2022, 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 and Review of Actuarial Assumptions. Mortality rates incorporate full generational mortality improvement using 80% of Scale MP-2020 published by the Society of Actuaries. For more details on this table, please refer to the 2021 experience study report from November 2021 that can be found on the CalPERS website.
63 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO THE BASIC FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2024
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 $ 11,744,242 $ 7,863,579 $ 4,669,459
Safety 18,879,663 13,127,102 8,423,974
Total $ 30,623,905 $ 20,990,681 $ 13,093,433
64 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO THE BASIC FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2024
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 ($157 per month for 2024) 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, 2024, 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 five years, 2.1 percent of payroll was contributed to the trust each year.
The City contributed $369,427 during the 2024 fiscal year which consisted of $177,914 of pay-as-you-go benefit payments, $120,100 in contributions to the trust, $722 in non-trust administration expenses, and $70,691 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 49 Inactive plan members entitled to but not yet receiving benefit payments 12 Active plan members 63
124
June 30, 2024 June 30, 2023
Total OPEB Liability (TOL) 3, $ 413,755 $ 3,674,391
Fiduciary Net Position (FNP) 1,709,751 1,433,714
Net OPEB Liability (NOL) $ 1,704,004 $ 2,240,677
Funded Status (FNP/TOL) 50.1% 39.0%
Fiscal Year Ending
65 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO THE BASIC FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2024
Note 6: Other Post-Employment Benefits (Continued)
The City’s net OPEB liability was measured as of June 30, 2024, and the total OPEB liability used to calculate the net OPEB liability was determined by an actuarial valuation dated June 30, 2023 that was rolled forward to determine the June 30, 2024 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, 2024, using the following actuarial assumptions, applied to all periods included in the measurement, unless otherwise specified:
Actuarial Valuation Date June 30, 2023
Contribution Policy City contributes full ADC
Discount Rate and Long-Term
Expected Rate of Return on Assets
5.50% at June 30, 2024; 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 2000-2019 Experience Study
Mortality Improvement Mortality projected fully generational with Scale MP-2021
Salary Increases Aggregate – 2.75% annually; Merit –
CalPERS 2000-2019 Experience Study
Medical Trend Non-Medicare – 8.50% for 2025, decreasing to an ultimate rate of 3.45% in 2076; Medicare
(Non-Kaiser) – 7.50% for 2025, decreasing to
an ultimate rate of 3.45% in 2076; Medicare
(Kaiser) – 6.25% for 2025, decreasing to an
ultimate rate of 3.45% in 2076
PEMHCA Minimum Increases 3.50% annually
Cap Increases No increases on $325 and $290 benefit
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%
66 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO THE BASIC FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2024
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, 2023 $ 3,674,391 $ 1,433,714 $ 2,240,677 Changes for the year:
Service cost 119,498 - 119,498
Interest 201,827 - 201,827
Assumption changes (134,658) - (134,658)
Actual vs. expected experience (198,698) - (198,698)
Contributions - employer - 369,427 (369,427)
Net investment income - 160,626 (160,626)
Benefit payments* (248,605) (248,605) -
Administrative expenses - (5,411) 5,411
Net changes (260,636) 276,037 (536,673)
Balance at June 30, 2024 $ 3,413,755 $ 1,709,751 $ 1,704,004 *Benefit payments include an implied subsidy of $70,691 for the measurement date June 30, 2024. 1% Decrease Current Rate 1% Increase
(4.50%) (5.50%) (6.50%)
Net OPEB Liability $ 2,128,823 $ 1,704,004 $ 1,352,059
1% Decrease Current Trend 1% Increase
Net OPEB Liability $ 1,434,316 $ 1,704,004 $ 2,092,734
67 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO THE BASIC FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2024
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, 2024, the City recognized OPEB income of $46,267. As of fiscal year ended June 30, 2024, 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 - $ $ 211,112
Changes in assumptions 6,905 282,178
Net difference between projected and
actual earnings on plan investments - 3,383
Total $ 6,905 $ 496,673
Fiscal Year Ended Outflows/(Inflows)
June 30, of Resources
2025 $ (160,068)
2026 (75,337)
2027 (68,129)
2028 (62,984)
2029 (43,076)
Thereafter (80,174)
Total $ (489,768)
68 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO THE BASIC FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2024
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, 2024:
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 $ 89,496
Pavement Maintenance Project 1,100,000
69 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO THE BASIC FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2024
Note 8: Risk Management (Continued)
The workers’ compensation and general liability claims payable of $780,015 reported at June 30, 2024, 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, 2024:
Beginning of Current Year Claims Balance at
Fiscal Year and Changes in Claim Fiscal Year
Liability Estimates Payments End
2022 - 2023 $ 1,098,000 $ (121,075) $ (138,925) $ 838,000 2023 - 2024 838,000 - (57,985) 780,015
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 -
Loan Payable 291,010 - 60,855 230,155 62,972
Compensated Absences 670,497 332,241 376,520 626,218 351,655 Claims (Note 8) 838,000 - 57,985 780,015 53,973
Total Governmental Activities $ 7,299,507 $ 332,241 $ 495,360 $ 7,136,388 $ 468,600 Business-Type Activities:
Bonds Payable
2017 Wastewater Revenue Refunding Bonds $ 5,215,000 $ - $ 320,000 $ 4,895,000 $ 330,000 Premium 332,211 - 25,555 306,656 25,555
Total Bonds Payable 5,547,211 - 345,555 5,201,656 355,555 Direct Borrowings and Direct Placements
San Elijo JPA Loan Payable - 2017 10,147,500 - 245,000 9,902,500 255,000 Total Direct Borrowings and Direct Placements 10,147,500 - 245,000 9,902,500 255,000 Compensated Absences 71,680 20,551 28,445 63,786 25,312 Total Business-Type Activities $ 15,766,391 $ 20,551 $ 619,000 $ 15,167,942 $ 635,867 70 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO THE BASIC FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2024
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, 2024, is $5,500,000.
The future principal and interest payments as of June 30, 2024, 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, 2024, the balance of the loan liability was $230,155.
Year Ending June 30, Principal Interest
2025 $ - $ 325,105
2026 - 325,105
2027 - 325,105
2028 - 325,105
2029 - 325,105
2030 - 2034 - 1,625,525
2035 - 2039 461,520 1,625,525
2040 - 2044 2,587,560 1,194,787
2045 - 2048 2,450,920 369,042
Total $ 5,500,000 $ 6,440,404
Bonds Payable
71 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO THE BASIC FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2024
Note 9: Long-Term Liabilities (Continued)
b. Governmental Activities (Continued)
The future principal and interest payments as of June 30, 2024, 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, 2024, is $4,895,000.
Year Ending June 30, Principal Interest
2025 $ 62,972 $ 7,402
2026 65,163 5,211
2027 67,431 2,943
2028 34,590 597
Total $ 230,156 $ 16,153
72 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO THE BASIC FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2024
Note 9: Long-Term Liabilities (Continued)
c. Business Type Activities (Continued)
The future principal and interest payments as of June 30, 2024, were as follows:
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, 2024, is $9,902,500.
Year Ending June 30, Principal Interest
2025 $ 330,000 $ 174,006
2026 340,000 164,106
2027 350,000 153,906
2028 370,000 136,406
2029 380,000 121,606
2030 - 2034 2,165,000 360,268
2035 - 2038 960,000 45,156
Total $ 4,895,000 $ 1,155,454
Bonds Payable
73 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO THE BASIC FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2024
Note 9: Long-Term Liabilities (Continued)
a. Business Type Activities (Continued)
The future principal and interest payments as of June 30, 2024, were as follows:
Compensated Absences
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
2025 $ 255,000 $ 414,288
2026 267,500 401,538
2027 280,000 388,163
2028 295,000 374,163
2029 310,000 359,413
2030 - 2034 1,785,000 1,556,565
2035 - 2039 2,210,000 1,134,221
2040 - 2044 2,645,000 696,900
2045 - 2047 1,855,000 150,300
Total $ 9,902,500 $ 5,475,551
Direct Borrowings
74 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO THE BASIC FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2024
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 $ 5,737,058 $ 5,737,058
Other operating 74,033 74,033
Non-operating 549,422 549,422
Gross revenues 6,360,513 6,360,513
Expenses 5,928,430 5,928,430
Net Income 432,083 432,083
Add Back:
Interest expense 577,500 577,500
Depreciation 560,246 560,246
Loss on disposal of capital assets (234,665) (234,665)
Net Revenues Available for Debt Service $ 1,335,164 1,335,164 (2011 and 2017 JPA Loans)
2017 Refunding Revenue Bonds Debt Service:
Principal repayment 245,000 245,000
Interest charges 424,088 424,088
Total debt service $ 669,088 669,088
Net Revenues Available for Debt Service $ 666,076
(2017 Wastewater Bonds)
2017 Wastewater Revenue Refunding Bonds Debt Service:
Principal repayment $ 320,000
Interest charges 186,806
Total debt service $ 506,806
Coverage Ratio 2.00 1.31
75 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO THE BASIC FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2024
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
Governmental Governmental
General City CIP Funds Funds
Nonspendable:
Inventories -$ -$ 44,707$ 44,707$
Prepaid Costs 41,024 - - 41,024
Total Nonspendable 41,024 - 44,707 85,731
Restricted:
Section 115 Pension Stabilization Trust 6,764,356 - - 6,764,356 TransNet - - 395,308 395,308
Gas Tax - - 749,514 749,514
Municipal Improvement Districts - - 1,320,231 1,320,231 Lighting District - - 3,653,387 3,653,387
COPS - - 334,543 334,543
Public Safety - - 812,555 812,555
Fire Mitigation - - 61,205 61,205
Coastal Area Business/Visitor Assistance & Enhancement - - 1,354,603 1,354,603 Miscellaneous Grants - - 134,100 134,100
Boating & Waterways - - 3,967 3,967
Housing - - 1,461,545 1,461,545
SB1 Streets & Roads - - 469,578 469,578
Capital Projects - 9,376,614 100,410 9,477,024
Sand Replenishment - - 1,388,516 1,388,516
Debt Service - - 25,886 25,886
Total Restricted 6,764,356 9,376,614 12,265,348 28,406,318 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 13,464,544 - (111,321) 13,353,223
Total Fund Balance $ 9,376,614$ 28,349,784 12,198,734$ 49,925,132$ Classification
76 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO THE BASIC FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2024
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, 2024 is as follows:
Note 12: Interfund Transactions
a. Due From and To Other Funds
At June 30, 2024, 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, 2024, the City had the following transfers:
Business-Type
Activities
Governmental Sanitation
Activities Fund
Capital assets, net of
accumulated depreciation 43, $ 138,419 $ 16,740,055
Less:
Bonds, notes and finance
purchase agreements (5,730,155) (4,895,000)
Add:
Unamortized premiums/(discounts) - (306,656)
Net investment in capital assets $ 37,408,264 $ 11,538,399 Due to Other Funds Due From Other Funds
Governmental Funds:
General Fund $ - $ 399,366
CDBG 17,478 -
Camp Programs 33,289 -
Enterprise Fund:
Solana Energy Alliance 348,599 -
Total $ 399,366 $ 399,366
City CIP Non-Major Governmental
Transfers Out Fund Funds Totals
General Fund $ 4,050,000 $ - $ 4,050,000
Non-Major Governmental Funds - 70,375 70,375
Total $ 4,050,000 $ 70,375 $ 4,120,375
Transfers In
77 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2024
Note 12: Interfund Transactions (Continued)
Transfer was made from the Lighting District nonmajor special revenue fund to the City Debt Service nonmajor debt service fund to provide resources for debt service payments.
Transfer was made from the General Fund to the City CIP fund for the purposes of funding capital projects.
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
2025 $ 421,914 $ 23,785 $ 445,699
2026 433,644 12,055 445,699
Total $ 855,558 $ 35,840 $ 891,398
78 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2024
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, 2024, 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 $437,782. This premium is being amortized over the estimated useful life of the facility of forty years.
A summary of the changes in the City's investment in the San Elijo Joint Powers Authority for the year ended June 30, 2024, is as follows:
The financial statements of the SEJPA can be obtained from the Solana Beach Finance Department located at Solana Beach City Hall, 635 S. Highway 101, Solana Beach, California 92075.
Operating revenues 10,972,933$
Operating expenses (13,011,403)
Net non-operating income 1,697,119
Capital contributions 1,819,884
Change in net position 1,478,533$
Total assets and deferred outflows of resources 118,847,477$ Total liabilities and deferred inflows of resources (43,259,812) Net position - total fund equity $ 75,587,665
Investment at June 30, 2023 37,054,566$
Capital contribution 548,657
Current year share in the joint venture net income (loss) (859,390) Investment at June 30, 2024 $ 36,743,833
79 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2024
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, 2024, were $1,585,000. 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, 2024, were $350,000.
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. 80 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2024
Note 15: Successor Agency Trust for Assets of Former Redevelopment Agency (Continued) 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, 2024, 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, concluding on December 1, 2035.
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 $2,309,268 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 $267,466 and the debt service obligation on the bonds was $200,802.
Year Ending June 30, Principal Interest Total
2025 138,200$ $ 62,778 $ 200,978
2026 142,700 58,098 200,798
2027 147,700 53,263 200,963
2028 152,500 48,260 200,760
2029 157,800 43,092 200,892
2030 - 2034 872,900 131,557 1,004,457
2035 - 2036 290,600 9,820 300,420
Total $ 1,902,400 $ 406,868 $ 2,309,268
Balance Balance Due Within
June 30, 2023 Additions Deletions June 30, 2024 One Year Fiduciary Funds:
2017 Tax Allocation
Refunding Bonds $ 2,035,900 $ - $ 133,500 $ 1,902,400 $ 138,200 81 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2024
Note 15: Successor Agency Trust for Assets of Former Redevelopment Agency (Continued) 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 8.
82 REQUIRED SUPPLEMENTARY INFORMATION
83 CITY OF SOLANA BEACH, CALIFORNIA
BUDGETARY COMPARISON SCHEDULE
GENERAL FUND
FOR THE YEAR ENDED JUNE 30, 2024
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 23,180,254 $ 23,180,254 $ 23,180,254 $ - Resources (Inflows):
Taxes:
Property 10,373,200 10,573,200 10,948,079 374,879
Transient occupancy 1,900,360 2,100,360 2,218,237 117,877 Sales 8,800,000 9,200,000 9,470,357 270,357
Franchise and other 3,603,750 3,603,750 3,930,046 326,296 Licenses and permits 614,750 814,750 815,647 897
Intergovernmental 99,850 201,922 240,330 38,408
Charges for services 829,000 879,000 852,040 (26,960)
Use of money and property 461,975 461,975 1,825,425 1,363,450 Fines and forfeitures 320,200 320,200 528,722 208,522
Other revenues 3,455,803 4,733,732 4,912,594 178,862
Amounts Available for Appropriations 53,639,142 56,069,143 58,921,731 2,852,588 Charges to Appropriations (Outflows):
General Government:
City Council 351,315 367,815 363,957 3,858
City Clerk 623,687 706,687 648,491 58,196
Legal Services 533,475 533,475 424,834 108,641
City Manager 672,917 683,517 585,127 98,390
Finance 1,261,032 2,528,108 2,462,773 65,335
Personnel 660,665 598,665 508,336 90,329
Information Systems 723,344 740,573 678,044 62,529
Support Services 1,711,815 2,098,313 1,637,828 460,485
Total General Government 6,538,250 8,257,153 7,309,390 947,763 Public Safety:
Marine safety 1,219,465 1,323,375 1,323,309 66
Law enforcement 4,819,738 4,819,738 4,816,255 3,483
Code & parking enforcement 309,447 309,447 289,305 20,142 Fire department 5,957,612 5,924,226 5,858,506 65,720
Animal regulation 94,000 94,000 93,236 764
Civil defense 154,591 154,591 154,118 473
Total Public Safety 12,554,853 12,625,377 12,534,729 90,648 Public Works:
Street and other 2,663,505 2,645,574 2,365,220 280,354
Engineering 626,452 727,357 584,991 142,366
Public Facilities 101,500 122,526 122,438 88
Total Public Works 3,391,457 3,495,457 3,072,649 422,808 Community Development:
Planning 1,113,292 1,077,182 910,372 166,810
Building services 536,794 670,044 612,608 57,436
Total Community Development 1,650,086 1,747,226 1,522,980 224,246 Community Services:
Community services 182,902 196,502 186,292 10,210
Recreation programs 684,022 699,472 682,390 17,082
Total Community Services 866,924 895,974 868,682 27,292 Capital Outlay 1,328,800 1,734,735 1,178,321 556,414
Interest Expense 35,196 35,196 35,196 -
Total Charges to Appropriations 26,365,566 28,791,118 26,521,947 2,269,171 Other Financing Sources (Uses):
Transfers in 1,367,130 1,733,400 - (1,733,400)
Transfers out (1,713,400) (5,783,400) (4,050,000) (1,733,400) Total Other Financing Sources (Uses) (346,270) (4,050,000) (4,050,000) (3,466,800) Budgetary Fund Balance, June 30 $ 26,927,306 $ 23,228,025 $ 28,349,784 $ 1,654,959 Budget Amounts
See Accompanying Notes to the Required Supplementary Information. 84 CITY OF SOLANA BEACH, CALIFORNIA
SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY
MISCELLANEOUS EMPLOYEES PENSION PLAN
LAST TEN FISCAL YEARS
JUNE 30, 2024
Measurement Date 2023 2022 2021 2020 2019
City of Solana Beach's Proportion
of the Net Pension Liability 0.15726% 0.15566% 0.06644% 0.05654% 0.05532% City of Solana Beach's Proportionate
Share of the Net Pension Liability $ 7,863,579 $ 7,283,498 $ 3,593,385 $ 6,151,557 $ 5,668,839 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 City of Solana Beach's Proportionate
Share of the Net Pension Liability as a
Percentage of the Miscellaneous
Employees Plan Covered Payroll 163.58% 209.11% 107.15% 185.69% 185.34% Plan Fiduciary Net Position as a
Percentage of the Total Pension Liability 72.59% 73.14% 88.29% 75.10% 75.26% Measurement Date 2018 2017 2016 2015 2014
City of Solana Beach's Proportion
of the Net Pension Liability 0.05550% 0.05313% 0.05241% 0.05706% 0.04245% City of Solana Beach's Proportionate
Share of the Net Pension Liability $ 5,177,151 $ 5,268,836 $ 4,534,940 $ 3,550,604 $ 2,651,591 City of Solana Beach's Miscellaneous
Employees Plan Covered Payroll $ 2,879,582 $ 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 179.79% 193.60% 174.87% 147.34% 105.34% Plan Fiduciary Net Position as a
Percentage of the Total Pension Liability 75.26% 72.59% 75.87% 79.82% 78.40% See Accompanying Notes to the Required Supplementary Information. 85 CITY OF SOLANA BEACH, CALIFORNIA
SCHEDULE OF EMPLOYER'S CONTRIBUTIONS
MISCELLANEOUS EMPLOYEES PENSION PLAN
LAST TEN FISCAL YEARS
JUNE 30, 2024
Fiscal Year 2024 2023 2022 2021 2020
Actuarially Determined Contribution $ 940,970 $ 886,210 $ 768,847 $ 685,457 $ 636,152 Contribution in Relation to the Actuarially
Determined Contribution 940,970 886,210 768,847 685,457 636,152 Contribution Excess (Deficiency) $ - $ - $ - $ - $ -
City of Solana Beach's Miscellaneous
Employees Plan Covered Payroll $ 5,470,650 $ 4,807,042 $ 3,483,076 $ 3,353,666 $ 3,312,829 Plan Fiduciary Net Position as a
Percentage of the Total Pension Liability 17.20% 18.44% 22.07% 20.44% 19.20% Fiscal Year 2019 2018 2017 2016 2015
Actuarially Determined Contribution $ 541,582 $ 460,816 $ 417,318 $ 385,634 $ 330,415 Contribution in Relation to the Actuarially
Determined Contribution 541,582 460,816 417,318 385,634 330,415 Contribution Excess (Deficiency) $ - $ - $ - $ - $ -
City of Solana Beach's Miscellaneous
Employees Plan Covered Payroll $ 3,058,602 $ 2,879,582 $ 2,721,499 $ 2,593,359 $ 2,409,776 Plan Fiduciary Net Position as a
Percentage of the Total Pension Liability 17.71% 16.00% 15.33% 14.87% See Accompanying Notes to the Required Supplementary Information. 86 CITY OF SOLANA BEACH, CALIFORNIA
SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY
SAFETY EMPLOYEES PENSION PLAN
LAST TEN FISCAL YEARS
JUNE 30, 2024
Measurement Date 2023 2022 2021 2020 2019
City of Solana Beach's Proportion
of the Net Pension Liability 0.17562% 0.17683% 0.12686% 0.09655% 0.09380% City of Solana Beach's Proportionate
Share of the Net Pension Liability $ 13,127,102 $ 12,151,239 $ 6,861,102 $ 10,505,198 $ 9,611,934 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 City of Solana Beach's Proportionate
Share of the Net Pension Liability as a
Percentage of the Miscellaneous
Employees Plan Covered Payroll 360.61% 537.93% 320.86% 439.63% 423.39% Plan Fiduciary Net Position as a
Percentage of the Total Pension Liability 68.70% 69.25% 88.29% 75.10% 75.26% Measurement Date 2018 2017 2016 2015 2014
City of Solana Beach's Proportion
of the Net Pension Liability 0.09361% 0.08816% 0.08774% 0.09490% 0.07208% City of Solana Beach's Proportionate
Share of the Net Pension Liability $ 8,884,523 $ 8,742,997 $ 7,592,101 $ 5,905,301 $ 4,940,589 City of Solana Beach's Miscellaneous
Employees Plan Covered Payroll $ 2,249,144 $ 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 395.02% 413.34% 358.78% 295.56% 256.57% Plan Fiduciary Net Position as a
Percentage of the Total Pension Liability 75.26% 72.59% 75.87% 79.82% 78.40% See Accompanying Notes to the Required Supplementary Information. 87 CITY OF SOLANA BEACH, CALIFORNIA
SCHEDULE OF EMPLOYER'S CONTRIBUTIONS
SAFETY EMPLOYEES PENSION PLAN
LAST TEN FISCAL YEARS
JUNE 30, 2024
Fiscal Year 2024 2023 2022 2021 2020
Actuarially Determined Contribution $ 1,366,543 $ 1,309,122 $ 1,169,287 $ 1,045,632 $ 988,753 Contribution in Relation to the Actuarially
Determined Contribution 1,366,543 1,309,122 1,169,287 1,045,632 988,753 Contribution Excess (Deficiency) $ - $ - $ - $ - $ -
City of Solana Beach's Miscellaneous
Employees Plan Covered Payroll $ 3,888,044 $ 3,640,252 $ 2,258,877 $ 2,138,322 $ 2,389,544 Plan Fiduciary Net Position as a
Percentage of the Total Pension Liability 35.15% 35.96% 51.76% 48.90% 41.38% Fiscal Year 2019 2018 2017 2016 2015
Actuarially Determined Contribution $ 838,065 $ 717,659 $ 673,212 $ 619,022 $ 519,933 Contribution in Relation to the Actuarially
Determined Contribution 838,065 717,659 673,212 619,022 519,933 Contribution Excess (Deficiency) $ - $ - $ - $ - $ -
City of Solana Beach's Miscellaneous
Employees Plan Covered Payroll $ 2,270,208 $ 2,249,144 $ 2,115,191 $ 2,116,065 $ 1,997,991 Plan Fiduciary Net Position as a
Percentage of the Total Pension Liability 36.92% 31.91% 31.83% 29.25% 26.02% See Accompanying Notes to the Required Supplementary Information. 88 CITY OF SOLANA BEACH, CALIFORNIA
SCHEDULE OF CHANGES IN NET OPEB LIABILITY AND RELATED RATIOS
RETIREE HEALTHCARE PLAN
LAST TEN FISCAL YEARS
JUNE 30, 2024
2024 2023 2022 2021 2020 2019 2018 2017
TOTAL OPEB LIABILITY
Service cost $ 119,498 $ 116,300 $ 118,609 $ 115,154 $ 140,334 $ 218,793 $ 231,577 $ 225,000 Interest 201,827 198,346 214,173 210,592 231,171 187,559 172,035 164,000 Actual vs. expected experience (198,698) - (43,558) - (42,558) - - - Assumption changes (134,658) - 11,837 - (384,986) (1,145,939) (242,883) - Benefit payments (248,605) (260,465) (263,592) (275,453) (248,040) (230,041) (219,042) (147,532) Net Changes (260,636) 54,181 37,469 50,293 (304,079) (969,628) (58,313) 241,468 Total OPEB Liability - Beginning 3,674,391 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) $ 3,413,755 $ 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 $ 369,427 $ 398,228 $ 402,299 $ 480,132 $ 446,751 $ 484,191 $ 307,582 $ 233,000 Net investment income 160,626 95,935 (189,608) 210,366 20,418 27,769 23,652 17,000 Benefit payments (248,605) (260,465) (263,592) (275,453) (248,040) (227,210) (219,042) (148,000) Administrative expenses (5,411) (4,005) (3,959) (3,382) (4,056) (2,496) (2,062) - Other changes - - - (1,390) - - - 151
Net Changes 276,037 229,693 (54,860) 410,273 215,073 282,254 110,130 102,151 Plan Fiduciary Net Position - Beginning 1,433,714 1,204,021 1,258,881 848,608 633,535 351,281 241,151 139,000 Plan Fiduciary Net Position - Ending (b) $ 1,709,751 $ 1,433,714 $ 1,204,021 $ 1,258,881 $ 848,608 $ 633,535 $ 351,281 $ 241,151 PLAN NET OPEB LIABILITY - ENDING (a) - (b) $ 1,704,004 $ 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 50.08% 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 $ 8,681,872 $ 7,935,037 $ 7,935,037 $ 7,671,497 $ 7,533,033 $ 7,506,736 $ 7,050,741 $ 6,666,082 City of Solana Beach's Net Retiree Healthcare
Plan OPEB Liability as a Percentage of Retiree
Healthcare Plan Covered-Employee Payroll 19.63% 28.24% 30.45% 30.29% 35.63% 42.67% 63.18% 69.36% See Accompanying Notes to the Required Supplementary Information. 89 CITY OF SOLANA BEACH, CALIFORNIA
SCHEDULE OF EMPLOYER CONTRIBUTIONS
RETIREE HEALTHCARE PLAN
LAST TEN FISCAL YEARS
JUNE 30, 2024
2024 2023 2022 2021 2020
Retiree Healthcare Plan Actuarially Determined Contribution $ 317,950 $ 321,907 $ 318,390 $ 389,000 $ 378,000 Retiree Healthcare Plan Contributions in Relation to the Actuarially Determined Contribution 369,427 398,228 402,299 480,132 446,751 Contribution Excess (Deficiency) $ 51,477 $ 76,321 $ 83,909 $ 91,132 $ 68,751 Retiree Healthcare Plan Covered-Employee Payroll $ 8,681,872 $ 7,935,037 $ 7,671,497 $ 7,533,033 $ 7,506,736 Plan Fiduciary Net Position as a
Percentage of the Total Pension Liability 4.26% 5.02% 5.24% 6.37% 5.95% 2019 2018 2017
Actuarially Determined Contribution $ 484,191 $ 220,491 $ 531,000 Contribution in Relation to the Actuarially
Determined Contribution 484,191 252,055 233,000
Contribution Excess (Deficiency) $ - $ 31,564 $ (298,000) City of Solana Beach's Miscellaneous
Employees Plan Covered Payroll $ 7,050,741 $ 6,666,082 $ 6,406,137 Plan Fiduciary Net Position as a
Percentage of the Total Pension Liability 6.87% 3.78% 3.64% See Accompanying Notes to the Required Supplementary Information. 90 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION
JUNE 30, 2024
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 2023-2024 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. Benefit Changes:
a. There were no changes to benefit terms that applied to all members of the Public Agency Pool. However, individual employers in the Plan may have provided a benefit improvement to their employees such as Golden Handshakes, service purchases, and other prior service costs.
b. In 2022, SB 1168 increased the standard retiree lump sum death benefit from $500 to $2,000 for any death occurring on or after July 1, 2023. For pooled plans this is a Class 3 benefit and there is no normal cost surcharge. The impact on the unfunded liability is included in the pool's differences between expected and actual experience.
2. Changes of Assumptions:
a. There were no assumption changes in 2023. Effective with the June 30, 2021 valuation date (June 30, 2022 measurement date), the accounting discount rate was reduced from 7.15% to 6.90%. In determining the long-term expected rate of return, CalPERS took into account long-term market return expectations as well as the expected pension fund cash flows. In addition, demographic assumptions and the price inflation assumption were changed in accordance with the 2021 CalPERS Experience Study and Review of Actuarial Assumptions. The accounting discount rate was 7.15% for measurement dates June 30, 2017 through June 30, 2021, 7.65% for measurement dates June 30, 2015 through June 30, 2016, and 7.50% for measurement date June 30, 2014.
91 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION (CONTINUED) JUNE 30, 2024
Note 2: Miscellaneous and Safety Employees’ Pension Plans (Continued)
3. Methods and assumptions used to determine contribution rates for the most recent year include:
a. Valuation Date: June 30, 2021
b. Actuarial Cost Method: Entry Age Normal Cost Method
c. Amortization Method: Varies by date established and source. May be level dollar or level percent of pay and may include direct rate smoothing. d. Asset Valuation Method: Market value of assets
e. Inflation: 2.30%
f. Salary Increases: Varies by category, entry age and duration of service. g. Discount Rate: 6.80% (net of administrative expenses) h. Payroll Growth: 2.80%
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, 2023
b. Contribution Policy: City contributes full ADC
c. Discount Rate and Long-Term Expected Rate of Return on Assets: 5.50% at June 30, 2024; 5.50% at June 30, 2023; Expected City contributions projected to keep sufficient plan assets to pay all benefits from trust d. General Inflation: 2.50% annually
e. Mortality, Retirement, Disability, Termination: CalPERS 2000-2019 Experience Study
f. Mortality improvement: Mortality projected fully generational with Scale MP-2021 g. 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.
h. Salary Increases: Aggregate -2.75% annually; Merit – CalPERS 2000-2019 Experience Study
i. Medical Trend: Non-Medicare – 8.50% for 2025, decreasing to an ultimate rate of
3.45% in 2076; Medicare (Non-Kaiser)– 7.50% for 2025, decreasing to an ultimate rate of 3.45% in 2076; Medicare (Kaiser) – 6.25% for 2025, decreasing to an ultimate rate of 3.45% in 2076.
j. PEMHCA Minimum Increases: 3.50% annually
k. Cap Increases: No increases on $325 and $290 benefit l. 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%
m. Changes of Assumptions:
i. The implicit subsidy was removed for PEMHCA minimum retirees after Medicare eligibility
92 CITY OF SOLANA BEACH, CALIFORNIA
NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION (CONTINUED) JUNE 30, 2024
Note 3: Retiree Healthcare Plan Other Post-Employment Benefits Plan (Continued) ii. CalPERS 2000-2019 Experience Study was used for demographic assumptions and merit salary increases
iii. Mortality improvement scale was updated to Scale MP-2021 iv. Updated medical trend rates
v. PEMHCA minimum trend rate updated from 3.75% to 3.50% vi. Waived retiree re-election updated to 0% at age 65
n. Changes of benefit terms: None
93 THIS PAGE INTENTIONALLY LEFT BLANK
94 SUPPLEMENTARY INFORMATION
95 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 Fund - accounts for revenues received and expenditures made for streetrelated 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. 96 Sand Replenishment Fund – accounts for sand replenishment, sand retention, and coastal improvement projects.
City Debt Service Fund - accounts for debt service in the City. 97 CITY OF SOLANA BEACH, CALIFORNIA
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
JUNE 30, 2024
TransNet
ASSETS
Cash and investments $ 723,311 $ 394,322 $ 1,434,792
Receivables:
Accounts - - -
Interest 2,345 986 4,510
Intergovernmental 31,010 - 6,091
Inventories - - -
Total Assets $ 756,666 $ 395,308 $ 1,445,393
LIABILITIES
Accounts payable $ 7,152 $ - $ 124,282
Accrued liabilities - - 880
Unearned revenues - - -
Due to other funds - - -
Total Liabilities 7,152 - 125,162
FUND BALANCES
Nonspendable - - -
Restricted 749,514 395,308 1,320,231
Unassigned (Deficit) - - -
Total Fund Balances (Deficit) 749,514 395,308 1,320,231 Total Liabilities, Deferred Inflows
of Resources and Fund Balances (Deficit) $ 756,666 $ 395,308 $ 1,445,393 Municipal
Improvement
Districts
Special Revenue Funds
Gas Tax
98 CITY OF SOLANA BEACH, CALIFORNIA
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
JUNE 30, 2024
ASSETS
Cash and investments
Receivables:
Accounts
Interest
Intergovernmental
Inventories
Total Assets
LIABILITIES
Accounts payable
Accrued liabilities
Unearned revenues
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)
$ 3,656,174 $ 358,599 $ 717,101
- - 104,176
11,486 - 2,234
6,301 - -
- - -
$ 3,673,961 $ 358,599 $ 823,511
$ 11,888 $ 24,056 $ 9,962
8,686 - 994
- - -
- - -
20,574 24,056 10,956
- - -
3,653,387 334,543 812,555
- - -
3,653,387 334,543 812,555
$ 3,673,961 $ 358,599 $ 823,511
Lighting
District
Special Revenue Funds
COPS Public Safety
99 CITY OF SOLANA BEACH, CALIFORNIA
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
JUNE 30, 2024
ASSETS
Cash and investments
Receivables:
Accounts
Interest
Intergovernmental
Inventories
Total Assets
LIABILITIES
Accounts payable
Accrued liabilities
Unearned revenues
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)
$ 63,111 $ - $ 1,355,738
- - -
201 - 3,532
- 741 -
- - -
$ 63,312 $ 741 $ 1,359,270
$ 2,107 $ - $ 4,667
- - -
- - -
- 17,478 -
2,107 17,478 4,667
- - -
61,205 - 1,354,603
- (16,737) -
61,205 (16,737) 1,354,603
$ 63,312 $ 741 $ 1,359,270
Fire
Mitigation
Special Revenue Funds
Coastal Area
Business /
Visitor
Assistance &
CDBG Enhancement
100
CITY OF SOLANA BEACH, CALIFORNIA
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
JUNE 30, 2024
ASSETS
Cash and investments
Receivables:
Accounts
Interest
Intergovernmental
Inventories
Total Assets
LIABILITIES
Accounts payable
Accrued liabilities
Unearned revenues
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 $ 36,365 $ 554,361
- - -
- - -
- 200,658 -
- - -
$ 3,967 $ 237,023 $ 554,361
$ - $ 409 $ 10,353
- - -
- 102,514 544,008
- - -
- 102,923 554,361
- - -
3,967 134,100 -
- - -
3,967 134,100 -
$ 3,967 $ 237,023 $ 554,361
Miscellaneous
Grants
Boating &
Waterways
Special Revenue Funds
Developer
Pass-Thru
101
CITY OF SOLANA BEACH, CALIFORNIA
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
JUNE 30, 2024
ASSETS
Cash and investments
Receivables:
Accounts
Interest
Intergovernmental
Inventories
Total Assets
LIABILITIES
Accounts payable
Accrued liabilities
Unearned revenues
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)
$ 1,457,020 $ - $ 410,371
- 5,176 -
4,525 - 1,204
- - 58,003
- 44,707 -
$ 1,461,545 $ 49,883 $ 469,578
$ - $ 17,510 $ -
- 48,961 -
- - -
- 33,289 -
- 99,760 -
- 44,707 -
1,461,545 - 469,578
- (94,584) -
1,461,545 (49,877) 469,578
$ 1,461,545 $ 49,883 $ 469,578
SB 1 Streets
& Roads
Camp
Housing Programs
Special Revenue Funds
102
CITY OF SOLANA BEACH, CALIFORNIA
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
JUNE 30, 2024
ASSETS
Cash and investments
Receivables:
Accounts
Interest
Intergovernmental
Inventories
Total Assets
LIABILITIES
Accounts payable
Accrued liabilities
Unearned revenues
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)
Debt Service
Fund
Total
$ 103,473 $ 1,405,249 $ 61,073 $ 12,735,027
- - - 109,352
- 3,072 - 34,095
- - - 302,804
- - - 44,707
$ 103,473 $ 1,408,321 $ 61,073 $ 13,225,985
$ 3,063 $ 19,805 $ 35,187 $ 270,441
- - - 59,521
- - - 646,522
- - - 50,767
3,063 19,805 35,187 1,027,251
- - - 44,707
100,410 1,388,516 25,886 12,265,348
- - - (111,321)
100,410 1,388,516 25,886 12,198,734
$ 103,473 $ 1,408,321 $ 61,073 $ 13,225,985
City Debt
Service
Assessment
Districts CIP
Sand
Replenishment
Capital Project Funds
103
CITY OF SOLANA BEACH, CALIFORNIA
COMBINING STATEMENT OF REVENUES,
EXPENDITURES AND
CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2024
Municipal
Improvement
Gas Tax TransNet Districts
REVENUES
Taxes and assessments $ 360,508 $ - $ 808,878
License and permits - - -
Intergovernmental - 640,105 2,575
Charges for services - - -
Use of money and property 31,276 12,149 58,389
Other revenues 1,200 - -
Total Revenues 392,984 652,254 869,842
EXPENDITURES
Current:
Public safety - - -
Public works 417 3,776 812,393
Community development - - -
Community services - - -
Capital outlay 315,727 315,000 -
Debt service:
Principal retirement - - -
Interest and fiscal charges - 325,105 -
Total Expenditures 316,144 643,881 812,393
Excess (Deficiency) of Revenue
Over (Under) Expenditures 76,840 8,373 57,449
OTHER FINANCING SOURCES (USES)
Transfers in - - -
Transfers out - - -
Total Other Financing Sources (Uses) - - -
Net Change in Fund Balance 76,840 8,373 57,449
Fund Balances (Deficit):
Fund Balance - Beginning 672,674 386,935 1,262,782
Fund Balance - Ending $ 749,514 $ 395,308 $ 1,320,231
Special Revenue Funds
104
CITY OF SOLANA BEACH, CALIFORNIA
COMBINING STATEMENT OF REVENUES,
EXPENDITURES AND
CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2024
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
$ 772,833 $ - $ -
- - -
3,051 186,159 260,369
- - -
152,345 10,633 11,240
- - 17,898
928,229 196,792 289,507
- 208,364 188,151
723,908 - -
- - -
- - -
- - -
- - -
- - -
723,908 208,364 188,151
204,321 (11,572) 101,356
- - -
(70,375) - -
(70,375) - -
133,946 (11,572) 101,356
3,519,441 346,115 711,199
$ 3,653,387 $ 334,543 $ 812,555
Special Revenue Funds
105
CITY OF SOLANA BEACH, CALIFORNIA
COMBINING STATEMENT OF REVENUES,
EXPENDITURES AND
CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2024
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
$ - $ - $ 221,824
- - -
- 741 -
22,101 - -
1,141 - 45,431
- - 5,394
23,242 741 272,649
26,908 741 -
- - -
- - 77,707
- - -
- - -
- - -
- - -
26,908 741 77,707
(3,666) - 194,942
- - -
- - -
- - -
(3,666) - 194,942
64,871 (16,737) 1,159,661
$ 61,205 $ (16,737) $ 1,354,603
Special Revenue Funds
106
CITY OF SOLANA BEACH, CALIFORNIA
COMBINING STATEMENT OF REVENUES,
EXPENDITURES AND
CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2024
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
$ - $ - $ -
- - -
- 308,667 -
- - 61,183
- 45,804 -
- - -
- 354,471 61,183
- 50,000 -
- 31,860 -
- - 61,183
- - -
- 226,807 -
- - -
- - -
- 308,667 61,183
- 45,804 -
- - -
- - -
- - -
- 45,804 -
3,967 88,296 -
$ 3,967 $ 134,100 $ -
Special Revenue Funds
107
CITY OF SOLANA BEACH, CALIFORNIA
COMBINING STATEMENT OF REVENUES,
EXPENDITURES AND
CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2024
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
$ - $ - $ 332,821
- - -
- - -
- 588,332 -
61,316 - 15,989
6,188 - -
67,504 588,332 348,810
- 601,187 -
- - -
808 - -
- 122,873 -
- - 400,205
- - -
- - -
808 724,060 400,205
66,696 (135,728) (51,395)
- - -
- - -
- - -
66,696 (135,728) (51,395)
1,394,849 85,851 520,973
$ 1,461,545 $ (49,877) $ 469,578
Special Revenue Funds
108
CITY OF SOLANA BEACH, CALIFORNIA
COMBINING STATEMENT OF REVENUES,
EXPENDITURES AND
CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2024
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)
Debt Service
Fund
Assessment Sand City Debt
Districts CIP Replenishment Service Total
$ - $ 443,648 $ - $ 2,940,512
- - - -
- - - 1,401,667
- - - 671,616
- 50,385 - 496,098
69,226 14,120 - 114,026
69,226 508,153 - 5,623,919
- - - 1,075,351
33,703 - - 1,606,057
- - - 139,698
- - - 122,873
8,995 213,414 - 1,480,148
- - 60,855 60,855
- - 9,519 334,624
42,698 213,414 70,374 4,819,606
26,528 294,739 (70,374) 804,313
- - 70,375 70,375
- - - (70,375)
- - 70,375 -
26,528 294,739 1 804,313
73,882 1,093,777 25,885 11,394,421
$ 100,410 $ 1,388,516 $ 25,886 $ 12,198,734
Capital Project Funds
109
CITY OF SOLANA BEACH, CALIFORNIA
BUDGETARY COMPARISON SCHEDULE
GAS TAX FUND
FOR THE YEAR ENDED JUNE 30, 2024
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 672,674 $ 672,674 $ 672,674 $ - Resources (Inflows):
Taxes and assessments 379,380 379,380 360,508 (18,872)
Use of money and property 2,100 2,100 31,276 29,176
Other revenues - - 1,200 1,200
Amounts Available for Appropriations 1,054,154 1,054,154 1,065,658 11,504 Charges to Appropriations (Outflows):
Current:
Public works - 418 417 1
Capital outlay 314,255 605,611 315,727 289,884
Total Charges to Appropriations 314,255 606,029 316,144 289,885 Budgetary Fund Balance, June 30 $ 739,899 $ 448,125 $ 749,514 $ 301,389 Budget Amounts
110
CITY OF SOLANA BEACH, CALIFORNIA
BUDGETARY COMPARISON SCHEDULE
TRANSNET FUND
FOR THE YEAR ENDED JUNE 30, 2024
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 386,935 $ 386,935 $ 386,935 $ - Resources (Inflows):
Taxes:
Service fees 50,000 50,000 - (50,000)
Intergovernmental 558,530 558,530 640,105 81,575
Use of money and property 1,575 1,575 12,149 10,574
Amounts Available for Appropriations 997,040 997,040 1,039,189 42,149 Charges to Appropriations (Outflows):
Current:
Public works - 40,350 3,776 36,574
Capital outlay 285,000 600,000 315,000 285,000
Debt service:
Interest and fiscal charges 325,105 325,105 325,105 -
Total Charges to Appropriations 610,105 965,455 643,881 321,574 Budgetary Fund Balance, June 30 $ 386,935 $ 31,585 $ 395,308 $ 363,723 Budget Amounts
111
CITY OF SOLANA BEACH, CALIFORNIA
BUDGETARY COMPARISON SCHEDULE
MUNICIPAL IMPROVEMENT DISTRICTS FUND
FOR THE YEAR ENDED JUNE 30, 2024
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 1,262,782 $ 1,262,782 $ 1,262,782 $ - Resources (Inflows):
Taxes and assessments 770,275 770,275 808,878 38,603
Intergovernmental 2,700 2,700 2,575 (125)
Use of money and property 15,278 15,278 58,389 43,111
Amounts Available for Appropriations 2,051,035 2,051,035 2,132,624 81,589 Charges to Appropriations (Outflows):
Current:
Public works 862,819 865,622 812,393 53,229
Total Charges to Appropriations 862,819 865,622 812,393 53,229 Budgetary Fund Balance, June 30 $ 1,188,216 $ 1,185,413 $ 1,320,231 $ 134,818 Budget Amounts
112
CITY OF SOLANA BEACH, CALIFORNIA
BUDGETARY COMPARISON SCHEDULE
LIGHTING DISTRICT FUND
FOR THE YEAR ENDED JUNE 30, 2024
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 3,519,441 $ 3,519,441 $ 3,519,441 $ - Resources (Inflows):
Taxes and assessments 717,488 717,488 772,833 55,345
Intergovernmental 3,200 3,200 3,051 (149)
Use of money and property 42,525 42,525 152,345 109,820 Amounts Available for Appropriations 4,282,654 4,282,654 4,447,670 165,016 Charges to Appropriations (Outflows):
Current:
Public works 754,591 779,104 723,908 55,196
Transfers out 70,375 70,375 70,375 -
Total Charges to Appropriations 824,966 849,479 794,283 55,196 Budgetary Fund Balance, June 30 $ 3,457,688 $ 3,433,175 $ 3,653,387 $ 220,212 Budget Amounts
113
CITY OF SOLANA BEACH, CALIFORNIA
BUDGETARY COMPARISON SCHEDULE
COPS FUND
FOR THE YEAR ENDED JUNE 30, 2024
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 346,115 $ 346,115 $ 346,115 $ - Resources (Inflows):
Intergovernmental 145,000 186,159 186,159 -
Use of money and property 3,150 3,150 10,633 7,483
Amounts Available for Appropriations 494,265 535,424 542,907 7,483 Charges to Appropriations (Outflows):
Current:
Public safety 145,000 208,365 208,364 1
Total Charges to Appropriations 145,000 208,365 208,364 1 Budgetary Fund Balance, June 30 $ 349,265 $ 327,059 $ 334,543 $ 7,484 Budget Amounts
114
CITY OF SOLANA BEACH, CALIFORNIA
BUDGETARY COMPARISON SCHEDULE
PUBLIC SAFETY FUND
FOR THE YEAR ENDED JUNE 30, 2024
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 711,199 $ 711,199 $ 711,199 $ - Resources (Inflows):
Intergovernmental 220,000 230,000 260,369 30,369
Use of money and property - - 11,240 11,240
Other revenues - - 17,898 17,898
Amounts Available for Appropriations 931,199 941,199 1,000,706 59,507 Charges to Appropriations (Outflows):
Current:
Public safety 220,000 231,542 188,151 43,391
Total Charges to Appropriations 220,000 231,542 188,151 43,391 Budgetary Fund Balance, June 30 $ 711,199 $ 709,657 $ 812,555 $ 102,898 Budget Amounts
115
CITY OF SOLANA BEACH, CALIFORNIA
BUDGETARY COMPARISON SCHEDULE
FIRE MITIGATION FUND
FOR THE YEAR ENDED JUNE 30, 2024
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 64,871 $ 64,871 $ 64,871 $ - Resources (Inflows):
Charges for services 15,000 15,000 22,101 7,101
Use of money and property - - 1,141 1,141
Amounts Available for Appropriations 79,871 79,871 88,113 8,242 Charges to Appropriations (Outflows):
Current:
Public safety 15,000 26,910 26,908 2
Total Charges to Appropriations 15,000 26,910 26,908 2
Budgetary Fund Balance, June 30 $ 64,871 $ 52,961 $ 61,205 $ 8,244 Budget Amounts
116
CITY OF SOLANA BEACH, CALIFORNIA
BUDGETARY COMPARISON SCHEDULE
CDBG FUND
FOR THE YEAR ENDED JUNE 30, 2024
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ (16,737) $ (16,737) $ (16,737) $ - Resources (Inflows):
Intergovernmental 45,000 51,921 741 (51,180)
Amounts Available for Appropriations 28,263 35,184 (15,996) (51,180) Charges to Appropriations (Outflows):
Current:
Public safety - 741 741 -
Capital outlay 45,000 51,180 - 51,180
Total Charges to Appropriations 45,000 51,921 741 51,180 Budgetary Fund Balance, June 30 $ (16,737) $ (16,737) $ (16,737) $ - Budget Amounts
117
CITY OF SOLANA BEACH, CALIFORNIA
BUDGETARY COMPARISON SCHEDULE
COASTAL AREA BUSINESS/VISITOR ASSISTANCE AND ENHANCEMENT FUND FOR THE YEAR ENDED JUNE 30, 2024
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 1,159,661 $ 1,159,661 $ 1,159,661 $ - Resources (Inflows):
Taxes and assessments 190,036 190,036 221,824 31,788
Use of money and property 10,500 10,500 45,431 34,931
Other revenues 3,500 3,500 5,394 1,894
Amounts Available for Appropriations 1,363,697 1,363,697 1,432,310 68,613 Charges to Appropriations (Outflows):
Current:
Community development 89,925 97,975 77,707 20,268
Total Charges to Appropriations 89,925 97,975 77,707 20,268 Budgetary Fund Balance, June 30 $ 1,273,772 $ 1,265,722 $ 1,354,603 $ 88,881 Budget Amounts
118
CITY OF SOLANA BEACH, CALIFORNIA
BUDGETARY COMPARISON SCHEDULE
MISCELLANEOUS GRANTS FUND
FOR THE YEAR ENDED JUNE 30, 2024
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 88,296 $ 88,296 $ 88,296 $ - Resources (Inflows):
Intergovernmental 7,254,000 7,305,536 308,667 (6,996,869) Use of money and property - - 45,804 45,804
Amounts Available for Appropriations 7,342,296 7,393,832 442,767 (6,951,065) Charges to Appropriations (Outflows):
Current:
General government 5,000 - - -
Public safety 13,000 50,000 50,000 -
Public works 236,000 34,229 31,860 2,369
Capital outlay 7,000,000 7,226,807 226,807 7,000,000
Total Charges to Appropriations 7,254,000 7,311,036 308,667 7,002,369 Budgetary Fund Balance, June 30 $ 88,296 $ 82,796 $ 134,100 $ 51,304 Budget Amounts
119
CITY OF SOLANA BEACH, CALIFORNIA
BUDGETARY COMPARISON SCHEDULE
DEVELOPER PASS-THRU FUND
FOR THE YEAR ENDED JUNE 30, 2024
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ - $ - $ - $ -
Resources (Inflows):
Charges for services 100,000 100,000 61,183 (38,817)
Amounts Available for Appropriations 100,000 100,000 61,183 (38,817) Charges to Appropriations (Outflows):
Current:
Community development 100,000 109,095 61,183 47,912
Total Charges to Appropriations 100,000 109,095 61,183 47,912 Budgetary Fund Balance, June 30 $ - $ (9,095) $ - $ 9,095 Budget Amounts
120
CITY OF SOLANA BEACH, CALIFORNIA
BUDGETARY COMPARISON SCHEDULE
HOUSING FUND
FOR THE YEAR ENDED JUNE 30, 2024
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 1,394,849 $ 1,394,849 $ 1,394,849 $ - Resources (Inflows):
Use of money and property 6,300 6,300 61,316 55,016
Other revenues - - 6,188 6,188
Amounts Available for Appropriations 1,401,149 1,401,149 1,462,353 61,204 Charges to Appropriations (Outflows):
Current:
Community development 10,000 10,000 808 9,192
Total Charges to Appropriations 10,000 10,000 808 9,192 Budgetary Fund Balance, June 30 $ 1,391,149 $ 1,391,149 $ 1,461,545 $ 70,396 Budget Amounts
121
CITY OF SOLANA BEACH, CALIFORNIA
BUDGETARY COMPARISON SCHEDULE
CAMP PROGRAMS FUND
FOR THE YEAR ENDED JUNE 30, 2024
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 85,851 $ 85,851 $ 85,851 $ - Resources (Inflows):
Charges for services 560,000 560,000 588,332 28,332
Amounts Available for Appropriations 645,851 645,851 674,183 28,332 Charges to Appropriations (Outflows):
Current:
Public safety 562,793 619,367 601,187 18,180
Community services 119,426 125,464 122,873 2,591
Total Charges to Appropriations 682,219 744,831 724,060 20,771 Budgetary Fund Balance, June 30 $ (36,368) $ (98,980) $ (49,877) $ 49,103 Budget Amounts
122
CITY OF SOLANA BEACH, CALIFORNIA
BUDGETARY COMPARISON SCHEDULE
SB1 STREETS & ROADS FUND
FOR THE YEAR ENDED JUNE 30, 2024
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 520,973 $ 520,973 $ 520,973 $ - Resources (Inflows):
Taxes and assessments 255,000 255,000 332,821 77,821
Use of money and property - - 15,989 15,989
Amounts Available for Appropriations 775,973 775,973 869,783 93,810 Charges to Appropriations (Outflows):
Capital outlay 300,000 700,206 400,205 300,001
Total Charges to Appropriations 300,000 700,206 400,205 300,001 Budgetary Fund Balance, June 30 $ 475,973 $ 75,767 $ 469,578 $ 393,811 Budget Amounts
123
CITY OF SOLANA BEACH, CALIFORNIA
BUDGETARY COMPARISON SCHEDULE
CITY CIP FUND
FOR THE YEAR ENDED JUNE 30, 2024
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 6,690,731 $ 6,690,731 $ 6,690,731 $ - Resources (Inflows):
Charges for services 250,000 250,000 7,662 (242,338)
Use of money and property 7,140 7,140 113,932 106,792
Other revenues 55,000 55,000 88,420 33,420
Transfers in 980,000 4,050,000 4,050,000 -
Amounts Available for Appropriations 7,982,871 11,052,871 10,950,745 (102,126) Charges to Appropriations (Outflows):
Current:
Public works - 20,211 20,196 15
Capital outlay 1,980,000 3,588,146 1,553,935 2,034,211
Total Charges to Appropriations 1,980,000 3,608,357 1,574,131 2,034,226 Budgetary Fund Balance, June 30 $ 6,002,871 $ 7,444,514 $ 9,376,614 $ 1,932,100 Budget Amounts
124
CITY OF SOLANA BEACH, CALIFORNIA
BUDGETARY COMPARISON SCHEDULE
SAND REPLENISHMENT
FOR THE YEAR ENDED JUNE 30, 2024
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 1,093,777 $ 1,093,777 $ 1,093,777 $ - Resources (Inflows):
Taxes and assessments 380,072 380,072 443,648 63,576
Use of money and property 8,400 8,400 50,385 41,985
Other revenues - - 14,120 14,120
Amounts Available for Appropriations 1,482,249 1,482,249 1,601,930 119,681 Charges to Appropriations (Outflows):
Capital outlay 374,600 402,182 213,414 188,768
Total Charges to Appropriations 374,600 402,182 213,414 188,768 Budgetary Fund Balance, June 30 $ 1,107,649 $ 1,080,067 $ 1,388,516 $ 308,449 Budget Amounts
125
CITY OF SOLANA BEACH, CALIFORNIA
BUDGETARY COMPARISON SCHEDULE
CITY DEBT SERVICE FUND
FOR THE YEAR ENDED JUNE 30, 2024
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 25,885 $ 25,885 $ 25,885 $ - Resources (Inflows):
Transfers in 70,375 70,375 70,375 -
Amounts Available for Appropriations 96,260 96,260 96,260 - Charges to Appropriations (Outflows):
Debt service:
Principal retirement 60,855 60,855 60,855 -
Interest and fiscal charges 9,520 9,520 9,519 1
Total Charges to Appropriations 70,375 70,375 70,374 1
Budgetary Fund Balance, June 30 $ 25,885 $ 25,885 $ 25,886 $ 1 Budget Amounts
126
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.
127
CITY OF SOLANA BEACH, CALIFORNIA
COMBINING STATEMENT OF FIDUCIARY NET POSITION
CUSTODIAL FUNDS
JUNE 30, 2024
Undergrounding South Solana
Districts Sewer District Total
ASSETS
Cash and cash equivalents $ 247,163 $ 77,479 $ 324,642
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:
Due from other governments 792 18 810
Total Assets 477,058 100,591 577,649
LIABILITIES
Accounts payable - 1,664 1,664
Total Liabilities - 1,664 1,664
NET POSITION
Restricted for:
Individuals, organizations, and other governments 477,058 98,927 575,985 Total Net Position $ 477,058 $ 98,927 $ 575,985
128
CITY OF SOLANA BEACH, CALIFORNIA
COMBINING STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
CUSTODIAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2024
Undergrounding South Solana
Districts Sewer District Total
ADDITIONS
Investment earnings $ 10,491 $ 1,458 $ 11,949
Special assessment collections 182,102 37,944 220,046
Other revenues - 33,703 33,703
Total Additions 192,593 73,105 265,698
DEDUCTIONS
Contractual services 7,319 1,514 8,833
Principal 80,000 20,000 100,000
Interest expense 79,641 17,851 97,492
Total Deductions 166,960 39,365 206,325
Net Increase (Decrease) in Fiduciary Net Position 25,633 33,740 59,373 Net Position - Beginning 451,425 65,187 516,612
Net Position - Ending $ 477,058 $ 98,927 $ 575,985
129
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130
STATISTICAL SECTION
This part of the City of Solana Beach's annual comprehensive financial report presents detailed information as context for understanding the information in the financial statements, note disclosures, and required supplementary information.
CONTENTS
Page
Financial Trends 132
These schedules contain trend information to help the reader understand how the government's financial performance and well-being have changed over time.
Revenue Capacity 135
These schedules contain information to help the reader assess the government's most significant local revenue sources.
Debt Capacity 140
These schedules present information to help the reader assess the affordability of the government's current levels of outstanding debt and the government's ability to issue additional debt in the future.
Demographic and Economic Information 144
These schedules offer demographic and economic indicators to help the reader understand the environment within which the government's financial activities take place.
Operating Information 147
These schedules contain service and infrastructure data to help the reader understand how the information in the government's financial report relates to the services the government provides and the activities it performs.
Sources: Unless otherwise noted, the information in these schedules is derived from the annual comprehensive financial reports for the relevant year.
131
2014 2015 2016 2017 2018 2020 2021 2022 2023 2024
Government activities
Net Investment in Capital
Assets $ 34,096 $ 32,416 $ 30,366 $ 28,412 $ 27,241 $ 26,666 $ 26,653 $ 26,397 $ 34,678 $ 37,408 Restricted 5,184 4,980 5,826 6,620 9,139 12,665 14,174 17,971 21,964 27,018 Unrestricted 6,872 (86) 1,231 1,795 (2,320) (1,488) (1,346) 290 5,289 8,223 Total governmental activities
net position $ 46,152 $ 37,310 $ 37,422 $ 36,827 $ 34,060 $ 37,843 $ 39,481 $ 44,658 $ 61,931 $ 72,649 Business-type activities
Net Investment in Capital
Assets $ 6,325 $ 6,799 $ 5,594 $ 6,195 $ 5,929 $ 12,053 $ 11,186 $ 11,656 $ 11,548 $ 11,538 Unrestricted 27,155 26,760 29,711 32,867 36,722 34,350 36,890 38,141 39,496 38,050 Total governmental activities
net position $ 33,480 $ 33,558 $ 35,306 $ 39,062 $ 42,651 $ 46,403 $ 48,076 $ 49,797 $ 51,044 $ 49,588 Primary government
Net Investment in Capital
Assets $ 40,421 $ 39,214 $ 35,960 $ 34,607 $ 33,170 $ 38,719 $ 37,839 $ 38,053 $ 46,225 $ 48,947 Restricted 5,184 4,980 5,826 6,620 9,139 12,665 14,174 17,971 21,964 27,018 Unrestricted 34,027 26,674 30,942 34,662 34,402 32,862 35,544 38,431 44,785 46,272 Total governmental activities
net position $ 79,632 $ 70,868 $ 72,728 $ 75,890 $ 76,711 $ 84,246 $ 87,557 $ 94,454 $ 112,975 $ 122,237
CITY OF SOLANA BEACH
Net Position by Component
Last Ten Fiscal Years (In thousands)
(Accrual Basis of Accounting)
Fiscal Year, Ended June 30
132
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Expenses
Governmental Activities:
General government $ 3,344 $ 3,944 $ 4,309 $ 4,101 $ 3,651 $ 4,985 $ 5,537 $ 4,570 $ 4,491 $ 5,858 Public safety 8,441 9,162 9,628 10,540 11,051 12,630 13,117 13,906 11,414 13,129 Public works 5,181 5,438 5,487 5,944 5,937 4,888 4,666 5,412 5,377 5,643 Community development 1,281 1,378 1,745 1,755 1,482 1,586 1,507 1,505 1,261 1,519 Community services 623 628 1,122 731 1,178 1,220 1,193 1,218 919 976 Interest on long-term debt 388 398 389 382 368 363 356 346 385 369 Total Governmental Activities expenses $ 19,259 $ 20,949 $ 22,681 $ 23,452 $ 23,668 $ 25,673 $ 26,376 $ 26,957 $ 23,848 $ 27,495 Business-Type Activities:
Sanitation $ 4,566 $ 3,569 $ 1,602 $ 2,100 $ 4,205 $ 4,221 $ 3,891 $ 4,308 $ 5,020 $ 7,887 Solana Energy Alliance Fund - - - 391 5,211 4,350 3,841 (127) 19 2 Total Business-Type Activities Expenses $ 4,566 $ 3,569 $ 1,602 $ 2,491 $ 9,415 $ 8,571 $ 7,733 $ 4,181 $ 5,039 $ 7,889 Total Primary Government Expenses $ 23,825 $ 24,518 $ 24,283 $ 25,943 $ 33,083 $ 34,244 $ 34,109 $ 31,139 $ 28,886 $ 35,383 Program Revenues
Governmental Activities:
Charges for services:
General government $ - $ - $ - $ - $ 194 $ 0 $ 92 $ 31 $ 1,126 $ 1,175 Public safety 465 578 621 577 581 402 325 385 463 588
Public works 239 417 450 699 1,006 358 494 1,566 605 169 Community development 853 928 1,252 1,300 1,169 1,191 1,083 1,274 1,597 1,469 Community services 348 365 400 336 336 23 277 507 549 591 Operating Contributions:
General government - - - - - - - (15) - -
Public safety 285 270 199 178 186 199 467 453 418 268
Public works 921 1,045 1,241 1,107 1,405 889 1,215 2,673 2,587 1,565 Community development 110 200 - 100 - - - - 2 96
Community services - - 129 139 149 80 233 161 165 186
Capital Contributions and Grants:
General government - - - - - - - (112) - -
Community development - - - - - - - - 8,466 167
Public safety 53 160 158 420 298 345 302 - - -
Total Governmental Activities Program Revenues $ 3,272 $ 3,964 $ 4,451 $ 4,857 $ 5,324 $ 3,488 $ 4,485 $ 6,925 $ 15,978 $ 6,274 Business-Type Activities:
Charges for services:
Sanitation $ 4,949 $ 5,152 $ 5,255 $ 5,416 $ 5,592 $ 5,588 $ 5,676 $ 5,817 $ 5,847 $ 5,737 Solana Energy Alliance Fund - - - 494 5,202 4,178 3,567 1 1 - Total Business-Type Activities Program Revenues 4,949 5,152 5,255 5,910 10,794 9,767 9,243 5,818 5,848 5,737 Total Primary Government Program Revenues $ 8,221 $ 9,116 $ 9,707 $ 10,767 $ 16,119 $ 13,254 $ 13,728 $ 12,743 $ 21,826 $ 12,012 Net (Expense)/Revenue
Governmental Activities $ (15,986) $ (16,985) $ (18,230) $ (18,596) $ (18,344) $ (22,185) $ (21,891) $ (20,032) $ (7,869) $ (21,220) Business-Type Activities 383 1,583 3,653 3,419 1,379 1,195 1,511 1,637 809 (2,151) Total primary Government Net Expense $ (15,604) $ (15,402) $ (14,577) $ (15,176) $ (16,965) $ (20,990) $ (20,380) $ (18,396) $ (7,061) $ (23,372) General Revenues and Other Charges in Net Position
Governmental Activities:
Taxes:
Property taxes, levied for general purpose $ 7,247 $ 7,706 $ 8,095 $ 8,587 $ 9,070 $ 9,465 $ 10,094 $ 10,523 $ 11,639 $ 12,353 Transient occupancy taxes 1,467 1,606 1,740 1,828 2,019 1,457 1,457 2,575 2,904 2,884 Sales taxes 2,808 3,255 3,128 3,191 3,503 3,292 3,690 4,413 5,846 9,470 Franchise taxes 766 736 733 723 793 751 789 874 897 857 Motor Vehicle in Lieu - Unrestricted 2,747 2,798 2,869 3,170 3,547 3,620 3,746 3,880 2,053 2,194 Use of money and property 137 261 284 287 1,101 1,133 632 (400) 783 2,435 Other 915 736 786 722 976 3,586 3,121 3,343 1,019 1,745 Total Governmental Activities $ 16,087 $ 17,097 $ 17,635 $ 18,509 $ 21,008 $ 23,304 $ 23,529 $ 25,209 $ 25,142 $ 31,938 Business-Type Activities:
Use of money and property $ 72 $ 115 $ 89 $ 82 $ 557 $ 423 $ 125 $ 35 $ 150 $ 561 Other 29 49 14 88 16 181 37 49 289 135
Total Business-Type Activities 101 164 103 170 573 604 162 84 438 696 Total Primary Government $ 16,188 $ 17,262 $ 17,738 $ 18,678 $ 21,581 $ 23,908 $ 23,691 $ 25,293 $ 25,581 $ 32,634 0 Changes in Net Position
Governmental Activities $ 101 $ 112 $ (595) $ (87) $ 2,664 $ 1,119 $ 1,638 $ 5,177 $ 17,273 $ 10,718 Business-Type Activities 484 1,747 3,757 3,589 1,952 1,799 1,673 1,721 1,247 (1,456) Total Primary Government $ 585 $ 1,860 $ 3,162 $ 3,502 $ 4,616 $ 2,918 $ 3,311 $ 6,898 $ 18,520 $ 9,262
CITY OF SOLANA BEACH
Changes in Net Position
Last Ten Fiscal Years (In thousands)
(Accrual Basis of Accounting)
Fiscal Year
133
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
General Fund
Nonspendable $ 9,382 $ 7,471 $ 20,164 $ 72,579 $ 23,402 $ 52,665 $ 54,212 $ 136,395 $ 41,589 $ 41,024 Restricted - 508,897 893,185 1,294,957 1,743,908 2,422,056 3,245,475 3,218,592 5,003,450 6,764,356 Committed 454,048 787,790 914,846 1,015,354 1,436,307 1,179,507 901,576 1,295,357 1,292,880 1,292,880 Assigned 5,324,048 5,520,890 5,690,381 5,805,890 6,041,593 6,349,702 6,206,689 6,241,345 6,786,980 6,786,980 Unassigned 5,580,686 6,200,244 6,805,201 7,385,736 4,588,069 5,450,148 7,138,002 9,289,801 10,055,355 13,464,544 Total General Fund 11,368,164$ 13,025,292$ 14,323,777$ 15,574,516$ 13,833,279$ 15,454,078$ 17,545,954$ 20,181,490$ 23,180,254$ 28,349,784$ All Other Governmental Funds
Nonspendable $ - $ - $ - $ 200 $ - $ - $ - $ 47,545 $ 47,545 $ 44,707 Restricted 4,979,850 5,316,698 5,726,668 7,844,224 9,494,837 10,242,525 10,928,273 14,752,364 16,960,567 21,641,962 Assigned 589,120 849,917 1,385,099 - - - - - - -
Unassigned (213,005) (184,544) (336,475) (234,689) (112,596) (58,138) (464,267) (227,092) 1,077,040 (111,321) Total all other Governmental Funds 5,355,965$ 5,982,071$ 6,775,292$ 7,609,735$ 9,382,241$ 10,184,387$ 10,464,006$ 14,572,817$ 18,085,152$ 21,575,348$
CITY OF SOLANA BEACH
Fund Balances of Governmental Funds
Last Ten Fiscal Years
(Modified Accrual Basis Of Accounting)
Fiscal Year
134
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Revenues:
Taxes and assessments $ 13,727,132 $ 14,719,229 $ 15,109,053 $ 15,945,223 $ 17,275,214 $ 16,842,473 $ 19,775,654 $ 22,265,851 $ 24,943,501 $ 29,507,231 Intergovernmental 2,674,057 3,069,673 3,185,272 3,498,266 3,665,899 3,284,923 1,916,664 3,322,539 11,286,855 1,641,997 Licenses and permits 461,687 471,581 527,146 508,549 486,891 345,168 532,496 773,593 1,089,274 815,647 Charges for services 1,001,943 1,313,658 1,699,140 1,584,561 2,230,614 1,268,823 1,449,714 2,754,210 1,802,138 1,531,318 Fines and forfeitures 392,683 502,921 495,885 479,933 502,249 359,703 244,331 261,932 408,220 528,722 Use of money and property 136,763 261,466 283,828 286,867 1,100,795 1,132,930 631,813 (399,689) 783,458 2,435,455 Other 961,755 735,521 785,872 1,061,983 975,510 3,585,904 3,121,247 3,348,906 4,102,253 5,115,040 Total revenues 19,356,020 21,074,049 22,086,196 23,365,382 26,237,172 26,819,924 27,671,919 32,327,342 44,415,699 41,575,410 Expenditures:
General government 3,222,933 3,500,443 3,777,819 3,820,029 4,191,376 4,705,339 5,032,268 5,598,530 7,061,076 7,309,390 Public safety 8,315,766 8,912,742 9,070,746 9,831,070 10,243,546 11,573,438 12,538,907 12,043,209 12,708,776 13,610,080 Public works 2,322,090 2,463,442 2,509,194 2,628,777 2,975,518 3,401,680 3,125,907 3,792,133 4,324,397 4,698,902 Community development 1,291,073 1,380,934 1,721,715 1,574,333 1,523,428 1,544,402 1,446,878 1,347,528 1,625,027 1,662,678 Community services 275,790 278,481 760,475 328,755 830,315 797,410 680,982 825,180 843,668 991,555 Capital outlay 1,773,690 2,190,316 1,473,835 2,417,383 5,763,230 1,692,966 1,800,676 1,430,880 10,752,411 4,212,404 Debt Service:
Principal retirement 155,930 161,086 288,487 296,366 303,971 316,505 319,071 199,531 203,808 60,855 Interest 388,523 383,130 392,219 383,487 374,519 365,239 355,735 346,004 385,436 369,820 Total expenses 17,745,795 19,270,574 19,994,490 21,280,200 26,205,903 24,396,979 25,300,424 25,582,995 37,904,599 32,915,684 Excess (Deficiency) of Revenues
Over (Under) Expenditures 1,610,225 1,803,475 2,091,706 2,085,182 31,269 2,422,945 2,371,495 6,744,347 6,511,100 8,659,726 Other financing sources (uses):
Transfers in 446,865 743,400 1,576,800 997,300 2,636,370 799,915 353,500 2,992,483 5,093,101 4,120,375 Transfers out (446,865) (743,400) (1,576,800) (997,300) (2,636,370) (799,915) (353,500) (2,992,483) (5,093,101) (4,120,375) Contributions to OPEB Trust Fund - (135,000) - - - - - - - Long-term debt issued - 614,759 - - - - - - -
Total other financing sources (uses) - 479,759 - - - - - - - - Net change in fund balances /
net position $ 1,610,225 $ 2,283,234 $ 2,091,706 $ 2,085,182 $ 31,269 $ 2,422,945 $ 2,371,495 $ 6,744,347 $ 6,511,100 $ 8,659,726 Capital assets used in debt
service calculation* $ 1,764,750 $ 2,194,361 $ 1,440,550 $ 2,432,556 $ 5,754,228 $ 1,697,994 $ 1,723,018 $ 1,537,279 $ 10,105,863 $ 2,882,183 Debt service as a percentage of
noncapital expenditures 3.4% 3.2% 3.7% 3.6% 3.3% 3.0% 2.9% 2.3% 2.1% 1.4% * 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.
CITY OF SOLANA BEACH
Changes In Fund Balances Of Governmental Funds
Last Ten Fiscal Years
(Modified Accrual Basis Of Accounting)
Fiscal Year
135
Taxable Assessed
Total Estimated Value as a
Total Taxable Direct Actual Percentage of
Fiscal Residential Commercial Other Assessed Tax Taxable Actual Year Property Property Property Value Rate ValueaTaxable Value 2015 $ 3,369,557 $ 468,396 $ 141,424 $ 3,979,377 0.1779% N/A N/A 2016 3,568,242 487,490 145,778 4,201,511 0.1778% N/A N/A 2017 3,771,217 501,508 156,383 4,429,108 0.1779% N/A N/A 2018 4,001,491 564,824 158,421 4,724,736 0.1778% N/A N/A 2019 4,270,745 594,932 172,181 5,037,858 0.1778% N/A N/A 2020 4,502,927 618,256 166,573 5,287,755 0.1780% N/A N/A 2021 4,738,936 632,197 175,989 5,547,122 0.1780% N/A N/A 2022 4,929,359 642,174 (24,412) 5,547,122 0.1781% N/A N/A 2023 5,334,233 657,405 238,875 6,230,513 0.1780% N/A N/A 2024 5,643,413 751,584 256,761 6,651,758 0.1781% 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 2014/15 - 2023/24 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)
136
General
Basic Municipal Total City's
Fiscal Tax Improvement Lighting Share of 1%
Year Levy District District Levy per Prop 13
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
2024 0.1602 0.0037 0.00955 0.1735
Carlsbad/ Solana Beach Metropolitan Santa Fe Mira CostaSan Dieguito Total Oceanside/ Santa Fe Educational School District Water Irrigation Comm Prop Aa Direct & Fiscal San Diego Vista School Community Irrigation Revenue Prop JJ District Tax Rate College 11/6/2013 Overlapping Year County (1) Projects Districts College District (2) Augmentation Debt Service Debt Service Reduction 2016A 2013A A1 Tax Rate 2015 0.167550 0.0004 0.40281 0.10486 0.025340 0.12551 - 0.0035 - - 0.0215 1.02497 2016 0.167550 0.0004 0.40281 0.10486 0.025340 0.12551 - 0.0035 - - 0.0227 1.02622 2017 0.167550 0.0004 0.40281 0.10486 0.025340 0.12551 - 0.0035 - - 0.0228 1.02625 2018 0.167490 0.0004 0.40285 0.10490 0.025330 0.12550 0.03093 0.0035 - 0.01443 0.0223 1.07115 2019 0.167490 0.0004 0.40293 0.10490 0.025330 0.12550 0.02886 0.0035 - 0.01294 0.0230 1.06828 2020 0.167490 0.0004 0.40293 0.10490 0.025330 0.12550 0.02800 0.0035 - 0.01299 0.0232 1.06767 2021 0.167490 0.0004 0.40290 0.10490 0.025330 0.12550 0.02688 0.0035 - 0.01373 0.0233 1.06738 2022 0.167490 0.0004 0.40290 0.10490 0.025330 0.12550 0.02653 0.0035 - 0.01339 0.0223 1.06575 2023 0.167490 0.0004 0.40290 0.10490 0.025330 0.12550 0.02506 0.0035 - 0.01357 0.0214 1.06356 2024 0.167490 0.0004 0.40290 0.10490 0.025330 0.12550 0.02346 0.0035 - 0.01164 0.0208 1.05938 (1)
(2)
(3)
Source:
Includes only rate(s) from indebtedness adopted prior to 1989 per California State Statute San Diego County Assessor 2023/24 Annual Tax Increment Tables and HdL Coren and Cone.
Overlapping Rates
Voter Approved (3)
(rate per $100 of taxable value)
City's Share of 1% Levy Per Prop 13
Overlapping Rates
Includes County School Services, Library, Childrens Institution Tuition, and Regional Occupational Centers.
Includes CWA, Santa Fe Irrigation District (.00423) and Santa Fe Irrigation (.02111)
CITY OF SOLANA BEACH
Direct and Overlapping Property Tax Rates
Last Ten Fiscal Years
137
Percentage
of Total City
Taxable Taxable
Assessed Assessed
Taxpayer Value Value
For the Fiscal Year Ended June 30, 2024
S B T C Holdings LLC $ 108,720,695 1.63%
Pacific Solana Beach Holdings LP (Pending Appeals on Parcels) 75,791,521 1.14% SB Corporate Centre III-IV LLC 63,052,308 0.95%
Solana Beach Self Storage Owner LP 49,470,000 0.74%
Zephyr Solana LLC 46,998,282 0.71%
G R E Beachwalk LLC (Pending Appeals on Parcels) 37,091,006 0.56% Sanyo Foods Corporation of America 35,931,125 0.54%
Sohi Affordable (Pending Appeals on Parcels) 34,039,097 0.51% E R P Operating LP 21,829,836 0.33%
Cedros Venture Fund I LLC 21,484,782 0.32%
Total $ 494,408,652 7.43%
For the Fiscal Year Ended June 30, 2015
S B T C Holdings LLC $ 113,796,155 2.86%
Pacific Solana Beach Holdings LP (Pending Appeals on Parcels) 63,640,835 1.60% SB Corporate Centre III-IV LLC 31,800,282 0.80%
Sanyo Foods Corporation of America 30,336,037 0.76%
Fenton Solana Highlands LLC (Pending Appeals on Parcels) 28,886,942 0.73% Muller-Beachwalk LLC (Pending Appeals on Parcels) 19,500,000 0.49% E R P Operating LP 18,482,152 0.46%
Lavida Delmar Associates LP 16,452,415 0.41%
Hankey Investment Company LP 14,164,014 0.36%
Urschel Laboratories Inc 13,431,722 0.34%
Total $ 350,490,554 8.81%
Source: HdL Coren & Cone and San Diego
County Assessor 2014/15 & 2023/24
CITY OF SOLANA BEACH
Principal Property Tax Payers
Current Year and Nine Years Ago
138
Fiscal
Year Taxes Levied Collections
Ended for the Percentage in Subsequent Percentage
June 30, Fiscal Year Amount of Levy Years Amount of Levy 2015 $ 6,576,197 $ 6,257,093 95.1% $ 215,422 $ 98% 6,472,515 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%
2024 11,296,637 10,658,832 94.4% 258,986 10,917,818 97% Sources:
CITY OF SOLANA BEACH
Property Tax Levies and Collections
Last Ten Fiscal Years
City of Solana Beach Finance Department, County of
San Diego Office of Auditor-Controller.
Collected within the
Fiscal Year of the Levy Total Collections to Date
139
Business-type
Activities
Refunding Total Percentage
Fiscal Lease Bonds Capital Bonds and Direct Primary of Personal Per Year ABAG Leases Borrowings/Placements Government Income a Capita a 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 2024 - 5,500,000 230,155 15,104,156 20,834,311 5.36% 1,617 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 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
Government Activities
140
Fiscal Year 2023-24 Assessed Valuation : $ 6,653,097,287 Percent Net
Gross Bonded Applicable Bonded
Overlapping Tax & Assessment Debt Debt Balance to City (1) Debt $ 18,210,000 0.172% $ 31,321
$ 359,270,000 4.665% $ 16,759,946
$ 408,120,000 7.717% $ 31,494,620
$ 24,380,000 0.555% $ 135,309
$ 87,455,000 32.322% $ 28,267,205
$ 1,940,000 100.000% $ 1,940,000
$ 3,720,000 1.292% 48,062 $
$ 78,676,463
$ 374,600,000 0.946% $ 3,543,716
$ 211,225,000 0.946% $ 1,998,189
$ 6,050,000 0.946% 57,233 $
$ 49,425,000 4.665% $ 2,305,676
$ 12,730,000 7.717% $ 982,374
$ 5,494,728 27.349% $ 1,502,753
City of Solana Beach Capital Lease Obligation $ 220,636 100.000% 220,636 $ 10,610,577
$ 1,902,400 100.000% $ 1,902,400
TOTAL DIRECT DEBT $ 220,636
TOTAL OVERLAPPING DEBT $ 90,968,804
COMBINED TOTAL DEBT (2) $ 91,189,440
Debt to Assessed Valuation Ratios :
Total Overlapping Tax & Assessment Debt
Total Direct Debt ($220,636)
Combined Total Debt
Redevelopment Incremental Valuation ($263,340,220) Ratio:
Total Overlapping Tax Increment Debt
Notes:
Source: California Municipal Statistics, Inc.
Total Direct & Overlapping General Fund Debt
1.37%
(1) - Percentage of overlapping agency's assessed valuation located within the boundaries of the city.
0.72%
San Diego County Superintendent of Schools General
Fund Obligations
San Dieguito Union High School District Certificates
of Participation
0.00%
1.18%
Solana Beach School District General Fund Obligations
Mira Costa Community College District Certificates of
Participation
(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, 2024
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
141
Legal Debt Margin Calculation for Fiscal Year 2024
Assessed value $ 6,653,097
Debt limit (15% of assessed value) 997,965
Debt applicable to limit:
General obligation bonds -
Total net debt applicable to limit -
Legal debt margin $ 997,965
Legal Debt
Total net debt Margin
Applicable to Legal Percentage of
Fiscal Year Debt Limit Limit Debt Margin Debt Limit
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)
142
Use of Net
Fiscal Money & Lease/ Less: Available
Year Property Rents Expenditures Revenue
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* - - - -
2024* - - - -
Fiscal
Year Principal Interest Coverage
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
2024* - - 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.
143
Personal Per
Income Capita
Calendar (thousands Personal Unemployment
Year Population of dollars) Income Rate
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%
2023 12,887 1,116,234 86,617 2.0%
Sources: HdL Coren & Cone report prepared on 8/19/24
CITY OF SOLANA BEACH
Demographic and Economic Statistics
Last Ten Calendar Years
144
Employer Category Industry
32nd St Naval Station 3 Federal Government-National Security Collins Aerospace 1 Aircraft Components-Manufacturers
Employees' Association - SDG&E 1 Associations
General Dynamics Nassco 1 Ship Builders & Repairers (Mfrs) Illumina Inc 1 Biotechnology Products & Services
Jennifer Moreno Dept - Veterans 1 Hospitals
Kaiser Permanente Vandever Med 2 Physicians & Surgeons
Kaiser Permanente Zion Med Ctr 1 Hospitals
MCCS MCRD San Diego - Marine Corps 2 Military Bases
Merchants Building Maintenance 1 Janitor Service
Naval Medical Center San Diego 2 Hospitals
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 San Diego 1 Hospitals
Scripps Research Institute 1 Laboratories-Research & Development 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
Sony Electronics Inc 1 Electronic Equipment & Supplies-Retail UCSD- Neural Computation 3 University-College Dept/Facility/Office University of California 3 University-College Dept/Facility/Office University of California - San Diego 3 Schools-Universities & College Academic Source:
State of California- Employee Development Department- Major Employers in San Diego for 2024 Categories
1 1,000-4,999 Employees
2 5,000-9,999 Employees
3 10,000+ Employees
CITY OF SOLANA BEACH
25 MAJOR EMPLOYERS - SAN DIEGO COUNTY
AS OF 2024
145
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Function/Program
General government
City Council 0.20 0.20 0.20 0.20 0.20 0.20 0.20 0.20 0.20 0.20 City Clerk 3.10 3.10 3.10 3.10 3.10 3.23 3.23 3.48 3.23 3.23 City Manager 2.05 2.05 1.80 1.90 1.90 2.48 2.48 2.58 2.58 2.58 Legal Services 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 Finance 3.55 3.55 3.55 3.45 3.05 3.30 3.70 3.35 3.35 3.90 Risk Mgt - Ins & Workers Comp - - - - - 1.20 1.20 1.20 1.20 1.35 Personnel/Human Resources 1.00 1.00 1.15 0.95 0.95 0.95 0.95 1.20 1.20 2.10 Info/Communication Systems 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.50 1.50 2.50 Community Development 6.00 6.00 5.80 5.80 5.80 6.00 7.00 6.00 6.00 7.00 Public Safety
Fire 19.95 19.95 19.95 20.20 20.20 20.20 20.20 20.20 20.20 19.20 Code Enforcement 1.80 1.80 1.80 1.80 1.80 1.80 1.80 1.80 1.80 1.80 Marine Safety 8.06 9.49 9.49 9.29 9.29 9.71 9.71 9.71 9.71 10.13 Junior Lifeguards 3.73 3.53 4.03 4.23 4.23 4.7 3.98 3.93 3.93 3.93 Public Works
Engineering 2.28 2.13 2.73 2.73 2.73 2.73 2.73 2.73 2.73 2.73 Environmental/Flood Control 1.10 1.10 1.05 1.05 1.05 1.05 1.05 1.20 1.20 1.35 Street Maintenance 2.95 2.95 2.95 2.95 2.95 2.95 2.95 2.95 2.95 2.35 Park Maintenance 1.35 1.35 1.35 1.35 1.35 1.35 1.25 1.35 1.35 1.00 Recreation & Community Services
Community Services 0.95 0.95 0.90 0.90 0.65 0.90 0.65 0.85 0.85 1.10 Recreation 2.46 2.48 2.43 2.43 2.38 2.43 2.33 2.50 2.45 2.45 Sanitation 2.93 3.22 3.12 3.37 3.37 3.37 3.37 3.37 3.37 4.84 Improvement Districts 0.90 0.90 0.90 0.90 0.90 0.90 0.90 0.95 0.95 1.70 Redevelopment Agency 0.90 0.90 1.10 0.80 0.80 0.80 0.14 0.24 0.24 0.12 Solana Energy Alliance* - - - - 0.75 0.75 0.75 - - -
Total Personnel 66.51 67.90 68.65 68.65 68.70 72.25 71.82 71.54 71.24 75.81 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) only operated from FY 2019 through FY 2021.
Last Ten Fiscal Years
Full-time-Equivalent City Government Employees by Function/Program
CITY OF SOLANA BEACH
Fiscal Year
Source: City of Solana Beach's Annual Budget
146
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Function/Program
Community development
Number of:
Business Certificates (A) 1,957 2,068 2,007 2,055 2,345 2,677 2,677 1,608 1,853 1,859 Plan checks (B) 275 304 284 319 319 399 399 483 699 899 Code violations (C) 1,016 1,240 1,124 2,513 2,656 8 - 155 177 246° Parking Citations N/A N/A N/A N/A N/A N/A N/A N/A N/A 1,892 Police (Calendar basis)
Number of calls for service (D) (E):
Priority 1 12 13 7 11 9 2 9 12 13 16
Priority 2 467 437 343 470 209 159 207 281 233 210
Priority 3 1,712 1,740 1,141 1,825 167 117 143 160 154 136 Priority 4 1,225 1,110 826 1,181 1,154 1,109 1,337 1,478 1,301 1,286 Priority 5 N/A N/A N/A N/A 247 226 337 345 274 258
Priority 6 N/A N/A N/A N/A 147 287 212 164 163 148
Priority 7 N/A N/A N/A N/A 703 619 832 831 834 766
Priority 8 N/A N/A N/A N/A - - - - - -
Priority 9 N/A N/A N/A N/A - - - - - -
FBI Index Crimes 305 240 173 227 139 117 231 246 219 250 Fire
Emergency Responses 1,798 1,810 1,883 1,859 1,792 1,792 1,495 1,569 1,469 1,884 Training Hours 6,178 5,997 4,696 4,687 6,350 6,350 6,375 7,053 6,374 6,990 Plan Checks 289 380 390 375 375 375 436 452 490 646
Public works
Miles of:
Street resurfacing/repair 550000** 5.3* 1.7* 2 3.8 1.0 0.8 1.1 5.3 5.3 Street sweeping 900* 900* 900* 504 504 504 504 504 504 504 Number of:
Street signal maintained 192 192 192 192 192 192 192 192 192 192 Trees pruned per year 40 40 500 274 280 280 280 280 280 290 Recreation & community services
Number of enrollees:
Day camp (Calendar basis) 329 266 315 322 315 312 290 303 294 301 Special events (attendees) 10,600 7,800 8,300 7,400 7,700 6,500 2,200 9,350 5,300 9,100 N/A - Data not available
(A) - Includes new & renewal licenses
(B) - Excludes temporary plan checks.
(C) - Code cases are based on the number of cases opened during the calendar year. ° estimated based on 9 months of data of calendar year 2024 (D) - Numbers adjusted and updated on ACFR 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)
CITY OF SOLANA BEACH
Operating Indicators by Function/Program
Last Ten Fiscal Years
147
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Function/Program
Public Safety
Code enforcement vehicles 2 2 2 2 2 2 2 2 2 2
Fire
Stations 1 1 1 1 1 1 1 1 1 1
Fire Engines 3 3 3 3 2 2 2 2 2 2
Fire Ladder Truck 1 1 1 1 1 1 1 1 1 1
Other vehicles 2 2 2 2 3 3 3 3 3 3
Public works
Streets (miles) 42 42 42 42 42 42 42 42 42 42
Street lights (city-owned) 527 527 527 525 525 525 525 525 525 525 Traffic signals 16 16 16 16 16 16 16 16 16 16
Public works vehicles 11 11 12 8 8 8 8 8 8 9
Public works Corporation Yard 1 1 1 1 1 1 1 1 1 1
Recreation & community service
Community centers 2 2 2 2 2 2 2 2 2 2
Parks 3 3 3 2 2 2 2 2 2 2
Marine Safety
Lifeguard Stations (Permanent)* 3 3 6 6 3 3 3 3 3 3
Lifeguard Stations (Temporary) N/A N/A N/A N/A 3 4 4 4 4 4 Vehicles 4 4 5 5 5 5 5 5 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
Last Ten Fiscal Years
Capital Asset Statistics by Function/Program
CITY OF SOLANA BEACH
148
149
CITY OF SOLANA BEACH
635 S. Highway 101
Solana Beach , CA 92075
www.cityofsol a na beach .org
(858) 720-2460
Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards
City Council
City of Solana Beach
City of Solana Beach, California
Independent Auditor’s Report
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of City of Solana Beach (the City), as of and for the year ended June 30, 2024, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements, and have issued our report thereon dated December 6, 2024.
Report on Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City's internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses or significant deficiencies may exist that have not been identified.
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
Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
Irvine, California
December 6, 2024
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, 2024, and have issued our report thereon dated December 6, 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 22, 2024, our responsibility, as described by professional standards, is to form and express opinions 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:
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.
Investments in joint ventures. We reviewed the City’s component unit joint venture financial statements to ensure the respective portion of the joint venture is properly calculated and accounted for.
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 2024. 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 to 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. Management has corrected all misstatements.
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 December 6, 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
December 6, 2024
CITY COUNCIL ACTION: ____________________________________________________ _________________________________________________________________________ AGENDA ITEM #
STAFF REPORT
CITY OF SOLANA BEACH
TO: Honorable Mayor and City Councilmembers
FROM: Alyssa Muto, City Manager
MEETING DATE: January 29, 2025
ORIGINATING DEPT: City Clerk’s Office – Angela Ivey, City Clerk SUBJECT: 2025 Annual Citizen Commission Appointments
BACKGROUND:
The City of Solana Beach has five Citizen Commissions that represent priorities of the City Council and who may be tasked with reviewing the City’s operating budget, focusing on the City’s climate goals, conducting City events, participating in community art opportunities, or reviewing feasible private development solutions. Each commission has a defined number of members that are appointed by the Council for two-year terms. These appointments have been staggered so that approximately half of the Solana Beach Citizen Commission members’ twoyear term appointments expire every January. By the end of January 2025, there will be a total of 18 scheduled vacancies of public appointments within all five Citizen Commissions that require new appointments by the Council for two-year terms. An additional vacancy opened during the Citizen Commission application period as a result of a resignation from the Climate Action Commission (now titled the Climate & Resiliency Commission). This vacancy is a midterm appointment and would be for a one-year term, concluding in January 2026.
All appointments to Citizen Commissions are conducted in accordance with Council Policy No. 5 - Appointment of Citizens to Boards, Commissions, Committees, and Task Forces (Attachment 2). All persons who were interested in serving on the City’s Citizen Commissions were required to complete and file a Citizen Interest Form (application), with the required references, and submit it to the City Clerk for formal application processing prior to the January 14, 2025, at 5:30 p.m. deadline. For those Commission members that were reapplying for their position’s scheduled vacancy, a re-submittal application was available for minor changes to their original full application, thus streamlining the application process. The Application/Citizen Interest Form is available year-round at the City Clerk’s Office and on the City’s website.
Pursuant to California Government Code Section 54972 (the “Maddy Act”), the posting of certain information of all current members appointed by City Council is required, listing the names of all serving appointees, original date of appointment, term and qualifications for all appointed positions. This posting requirement was met on November 21, 2024, (Attachment 1) on the City’s bulletin board and on the City’s website.
January 29, 2025
Citizen Commissions Annual Appointments