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 accompanying City Projects Capital Projects Fund budgetary comparison schedule, combining and individual nonmajor fund financial statements, and budgetary comparison information, are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the City Projects Capital Projects Fund budgetary comparison schedule, combining and individual nonmajor fund financial statements and budgetary comparison information are fairly stated, in all material respects, in relation to the basic financial statements as a whole.
Other Information
Management is responsible for the other information included in the annual report. The other information comprises the introductory and statistical sections but does not include the basic financial statements and our auditor's report thereon. Our opinions on the basic financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon.
In connection with our audit of the basic financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the basic financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report.
Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 22, 2023, on our consideration of the City's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City's internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering City's internal control over financial reporting and compliance.
Badawi & Associates, CP As
Berkeley, California
December 22, 2023
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Management's Discussion and Analysis
As management of the City of Solvang, we offer readers of the City of Solvang's financial statements, this narrative overview and analysis of the financial activities of the City of Solvang for the fiscal year ended June 30, 2023. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal, which can be found on pages 3-6 of this report.
Financial Highlights
• The General Fund reported a fund balance of $17 .6 million at the end of the 2023 fiscal year; an increase of approximately $3.1 million or 21.3% above the fiscal year 2021-2022 balance.
Per the Combined Reserve and Fund Policy, 50% of the current year operating budget is committed for the emergency contingencies which of the $17.6 million, $7.2 million is committed to emergencies. The Emergency Contingency increased $2,435,744.00. • Citywide, the total net position increased by $6.1 million or 11.9% higher than 2021-2022 after conducting all operations and programs. The net position totaled $57.8 million dollars at yearend. Of that amount, $25.9 million (the unrestricted net position) may be used to meet the City's ongoing obligations and operating expenses for the next fiscal year. • The City's Governmental activities reported a net position of $33.3 million dollars. Of the $33.3 million dollars, $14.9 million remains unrestricted and available. • Overall, Citywide revenues from governmental activities, grants and taxes increased approximately $1.2 million compared to the 2021-2022 fiscal year. This increase is due to the increase of Occupancy, Sales tax and interest received by the City. • Impact Fees ended FY 2022-2023 with a fund balance of $1.6 million; an increase of approximately $53 thousand from FY 2021-2022. The increase is primarily due to a reduction in Capital Improvement Projects being funded by Impact Fees. • The Proprietary funds ended the fiscal year with a net position of $24.6 million (including the funds' net investment in capital assets).
• The City's other non-major governmental funds ended FY 2022-2023 with a fund balance of $1.9 million, an increase of $73 thousand from FY 2021-2022. The increase is due in part to a reduction in Measure A and Highway Users Tax funds being used to fund projects. 190
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Management's Discussion and Analysis
Overview of the Financial Statements
The discussion and analysis provided here are intended to serve as an introduction to the City of Solvang's basic financial statements. The City of Solvang's basic financial statements consist of three components: 1) government-wide financial statements, 2) fund financial statements, and 3) the notes to financial statements. This report also includes supplementary information intended to furnish additional detail to support the basic financial statements themselves.
Government-wide Financial Statements. The government-wide financial statements are designed to provide readers with a broad overview of the City of Solvang' s finances, in a manner similar to a private-sector business.
The statement of net position presents financial information on all of the City of Solvang's assets, liabilities, deferred outflows and inflows of resources with the difference reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City of Solvang is improving or deteriorating.
The statement of activities presents information showing how the City of Solvang's net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows.
Thus, revenues and expenses are reported for some items that will only result in cash flows in future fiscal periods ( e.g., uncollected taxes and earned but unused vacation leave). Both of the government-wide financial statements distinguish functions of the City of Solvang that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the City of Solvang include general government, public safety, highways and streets, planning and economic development, and culture and recreation. The business-type activities of the City of Solvang include water, wastewater and transit operations.
Fund Financial Statements. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City of Solvang, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the City of Solvang can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds. 191
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Management's Discussion and Analysis
Governmental Funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on nearterm inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in assessing a government's near-term financing requirements.
Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements.
By doing so, readers may better understand the long-term impact of the government's near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities.
The City of Solvang maintains eight individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the general fund, and the impact fee fund, which are considered to be major funds. Data from the other six governmental funds are combined into a single aggregated presentation. Individual fund data for each of these nonmajor governmental funds is provided in the form of combining statements in the combining and individual fund statements and schedules section of this report.
The City of Solvang adopts an annual appropriated budget for its general fund. A budgetary comparison statement has been provided for the general fund to demonstrate compliance with this budget.
The basic governmental fund financial statements can be found on pages 42-45 of this report.
Proprietary Funds. The City of Solvang maintains two different types of proprietary funds.
Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The City of Solvang uses enterprises funds to account for its water, wastewater, and transit operations. Internal service funds are an accounting device used to accumulate and allocate costs internally among the City of Solvang various functions. The City of Solvang uses an internal service fund to account for the replacement of its fleet of vehicles and major equipment. Because these services predominantly benefit governmental rather than business-type functions, they have been included within governmental activities in the government-wide financial statements. Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for the water, wastewater, and transit operations, all of which are considered to be major funds of the City of Solvang. Conversely, the internal service fund is a single presentation in the proprietary fund financial statements.
The basic proprietary fund financial statements can be found on pages 48-53 of this report. 192
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Management's Discussion and Analysis
Fiduciary Funds. Fiduciary funds are used to account for resources held for the benefit of parties outside of the government. Fiduciary funds are not reported in the government-wide financials statements because the resources of those funds are not available to support the City of Solvang own programs. The accounting used for fiduciary funds is much like that used for proprietary funds.
The City of Solvang maintains one type of fiduciary funds. The Custodial fund reports resources held by the City of Solvang in a custodial capacity for individuals, private organizations, and other governments. The City of Solvang maintains one custodial fund on behalf of the Santa Ynez Valley Tourism Business Improvement District (District). The City collects the revenue from the local hotels, and then remits the funds to the District.
The fiduciary fund financial statements can be found on pages 56-57 of this report.
Notes to the Financial Statements. The notes provide additional information that is necessary to acquire a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found on pages 61-88 of this report.
Other Information. In addition to the basic financial statements and accompanying notes, this report also presents required supplementary iriformation concerning the general and impact fee funds budget to actual comparisons, funding progress on the City's other post-employment benefits (OPEB), the City's proportionate share of the net pension liability in regards to the California Public Employees Retirement System (CalPERS) cost sharing pool of which the City is a member, and the City's pension plan employer contributions. Required supplementary information can be found on pages 90-98 of this report.
The combining statements referred to earlier in connection with nonmajor governmental funds and internal service funds are presented immediately following the required supplementary information on the City's pension liability. Combining and individual fund statements and schedules can be found on pages 102-110 of this report.
Government-wide Overall Financial Analysis
As noted earlier, net position over time may serve as a useful indicator of a government's financial position. In the case of the City of Solvang, assets and deferred outflows of resources exceeded liabilities by $57,845,252 at the close of the most recent fiscal year. 193
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Management's Discussion and Analysis
City of Solvang Net Position
Table A-1
City of Solvang �et Position
Go,·emmental Acti,-ities Business-I"� Acfo,-ities
Assets: 2022 2023 2022 2023 2022
Current and other Assets s 19, 8, 66 s 22,898,194 s 12,22 ,052 s 12,945,20 s 32,005,818 Capital Assets 13,988,390 14,902,003 12,865,006 13,568,69S 26,853,396 Total Assets s 33.767.156 s 37.800.197 s 25.092.058 s 26.513.905 s 58.859.214 Deferred outflows of
resources:
Pension and OPEB
plans deferrals s SSl .865 s 2.045.194 s 293.955 s 6S1.731 s 1.175.S20 Current liabilities s 634,46 s 599,530 s 244,046 s 443,504 s S S,513 1 oncurrent liabilities 3,109,832 5,241,091 1,05 ,409 I, 69,49S 4,16 ,241 Total Liabilities s 3.744.299 s 5.840.621 s 1.301.455 s 2.213.002 s 5.045.754 Deferred inflows of resources:
Pension, OPEB, and leases s 2319.06S s 31.S19 s 955.650 s 410.333 s 3.2 4. IS . et Position:
lm·ested in capital assets s 13,988,390 s 14,902,003 s 12,865,006 s 13,56S,69S s 26,853,396 Restricted 3,390,500 3,49S,5 3 3,390,500
Unrestricted 11,206, 64 14,S 2,3 5 10,263,902 11,003,603 21,4 0,666 Total. 'et Position s 28.585.654 s 33,272.951 s 23.128.908 s 24,572.301 s 51.714.562 Total
Percentage
Total Change
2023 2022-2023
s 35,843,401 12%
2S,4 0, 01 6%
s 64.31U02 9%
s 2. 26.925 132%
s 1,043,034 19%
,010,5S9 6S%
s 8.053.623 60%
s 1.142.152 -65%
s 2S,4 0, 01 6%
3,49S,5 3 3%
25,S 5,9 S 21%
s 57.845.252 12%
By far, the largest portion of the City of Solvang' s net position ( 49%) reflects its investment in capital assets (e.g. land, buildings, machinery, equipment, vehicles, and infrastructure), less any related outstanding debt that was used to acquire those assets. The City of Solvang uses these capital assets to provide a variety of services to its citizens. Accordingly, these assets are not available for future spending.
An additional portion of the City of Solvang's net position (6%) represents resources that are subject to external restrictions on how they may be used. The remaining balance of $25.6 million is unrestricted and may be used to meet the government's ongoing obligations to its citizens and creditors.
At the end of the current fiscal year, the City of Solvang is able to report positive balances in all reported categories of net position, both for the government as a whole, as well as for its separate governmental and business-type activities. The same situation held true for the prior fiscal year. 194
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$30,000,000
$25,000,000
$20,000,000
$15,000,000
$10,000,000
$5,000,000
$-
Management's Discussion and Analysis
CITY OF SOLVANG Net Position
June 30, 2022 and 2023
Invested in Capital Assets Restricted
■2022 ■2023
Unrestricted
The City of Solvang's overall net position increased by $6.1 Million from the prior fiscal year.
The reasons for this overall increase are discussed in the following sections for governmental and business-type activities.
Governmental Activities. Taxes are the primary source of revenue for governmental activities and account for 73% of all revenues. The tax category includes property tax, sales tax, transient occupancy tax (TOT) and other taxes.
Solvang is a tourist community and the largest portion of its tax revenues come from transient occupancy tax (local hotel tax). These taxes generate 42.2% of all governmental-type revenues.
In fiscal year 2022-23, local hotel tax increased approximately $280 Thousand or 4.6% from fiscal year 2021-22.
195
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Management's Discussion and Analysis
The City's governmental-type operating expenses consist of public safety, culture and recreation, public works, general government, and community development.
When all operations were concluded, the governmental activities function generated an increase of $4.7 Million in net position for FY 2022-23.
TableA-2
City of Solvang's Changes in 'et Position
Total
Percentage
Governmental Activities Business-type Activities Total Change 2023 2022 2023 2022 2023 2022 2022-2023
Revenues:
Program revenues
Charges $ 1,561,382 $ 1,382,037 $ 7,121,414 $ 6,846,318 $ 8,682,796 $ 8,228,355 6% Operating grants and contnbutions 1,735,759 2,242,909 1,826,086 1,470,179 3,561,845 3,713,088 -4% Capital grants and contnbutions 155,723 139,958 43,735 166,715 199,458 306,673 -35% General revenues:
Transient occupancy taxes 6,311,438 6,031,568 6,311,438 6,031,568 5% Property, sales and other taxes 4,618,039 4,030,858 4,618,039 4,030,858 15% Other 658,769 (41,348) 199,569 (48,721) 858,338 (90,069) -1053% Total revenues 15,041,110 13,785,982 9,190,804 8,434,491 24,231,914 22,220,473 9% Expenses:
General government 2,805,808 2,911,369 2,805,808 2,911,369 -4% Public safety 2,373,664 2,189,633 2,373,664 2,189,633 8% Culture and recreation 1,093,712 1,221,471 1,093,712 1,221,471 -10% Community development 808,250 805,316 808,250 805,316 0% Public works 3,179,379 2,580,297 3,179,379 2,580,297 23% Water 4,303,277 5,216,176 4,303,277 5,216,176 -18%
\Vastewater 2,402,724 2,248,410 2,402,724 2,248,410 7%
Transit 1,134,410 1,099,939 1,134,410 1,099,939 3%
Total expenses 10,260,813 9,708,086 7,840,411 8,564,525 18,101,224 18,272,611 -1% Increase (decrease) in net position
before transfers 4,780,297 4,077,896 1,350,393 (130,034) 6,130,690 3,947,862 55% Transfers (93,000) (57,968) 93,000 57,698
Increase (decrease) in ner position 4,687,297 4,019,928 1,443,393 (72,336) 6,130,690 3,947,862 55% Net position, beginning $28,585,654 $24,565,726 $23,128,908 $23,200,974 $51,714,562 $47,766,700 8% -et position, ending $33,272,951 $28,585,654 $24,572,301 $23,128,638 $ 57,845,252 $51,714,562 12% 196
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Management's Discussion and Analysis
Expenses and Program Revenues- Governmental Activities
$3,500,000
$3,000,000
$2,500,000
$2,000,000
$1,500,000
$1,000,000
$500,000
$-
General Public Safety Culture and Community Public Works Government Recreation Development
■Expenses
■ Revenues
Business-type Activities. For the City of Solvang's business-type actlv1tles, the City's net position increased, ending the year with a balance of $24,572,301. The increase in net position for business-type activities (water, wastewater, and transit funds) was approximately $1.4 Million from the prior fiscal year. Water revenue decreased by 2.2% due to a reduction in connections compared to the prior fiscal year. Water expenses decreased by 18%. This decrease is mainly due to less Capital Improvement Projects. Wastewater revenue increased by 24.7% due primarily to new sewer rates being implemented. Wastewater expenses increased by 7% and Transit expenses increased by 3%. The increases are due to an increase in energy and fuel costs.
Financial Analysis of Governmental Funds
As noted earlier, the City of Solvang uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements.
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Management's Discussion and Analysis
Governmental Funds. The focus of the City of Solvang's governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City of Solvang's financing requirements. In particular, unassigned fund balance may serve as a useful measure of a government's net resources available for discretionary use as they represent the portion of fund balance which has not yet been limited to use for a particular purpose by either an external party, the City of Solvang itself, or a group or individual that has been delegated authority to assign resources for use for particular purposes by the City of Solvang's City Council.
At June 30, 2023, the City of Solvang's governmental funds reported combined fund balances of $21,098,246, an increase of 3,190,387 in comparison with the prior year. Approximately 48.9% of this amount ($10,315,906) constitutes unassigned fund balance, which is available for spending at the government's discretion. The remainder of the fund balance is either nonspendable, restricted, or committed, to indicate that it is 1) not in spendable form ($17,390) 2) restricted for particular purposes ($3,498,573) or 3) committed for particular purposes ($7,266,377). The increase in governmental funds from fiscal year 2021-22 to fiscal year 2022-23, was due primarily to increased tax revenues.
Unassigned
Committed
Restricted I
Nonspendable
$- $2,000
General Fund
Components of Fund Balance
June 30, 2023 and 2022
$4,000 $6,000
Thousands
$8,000 $10,000 $12,000
■2023
■2022
The general fund is the primary operating fund for the City of Solvang. At the end of the current fiscal year, the unassigned fund balance of the general fund was $10,335,782, while total fund balance increased to $17,645,864. Impact Fees ended FY 2022-2023 with a fund balance of $1.57 million, a increase of approximately $53 thousand from FY 2022-2023. The increase is a result of using less impact fee funds to fund projects around the City of Solvang. 198
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$(500)
'
$-
Management's Discussion and Analysis
$500 $1,000
Other Governmental Funds
Components of Fund Balance
June 30, 2023 and 2022
$1,500 $2,000 $2,500
Thousands
$3,000 $3,500
Unassigned
Committed
■2023
Restricted ■ 2022
Nonspendable
Proprietary Funds. The City ofSolvang's proprietary funds provide the same type of information found in the government-wide financial statements, but in more detail.
Unrestricted net position for the Water and Wastewater funds at the end of the year were $7,820,534 and $1,519,529 respectively. Total net position for Water increased by $1.1 Million.
The Wastewater fund increased its net position by $175,284. The Wastewater Division shows an operating surplus due to increased revenues and slight decreases in Salaries and Benefits.
Transit operations unrestricted net position totaled $1,663,540 a decrease of$206,479 from fiscal year 2021-22. Transit operations' total net position increased by 8.9% to end the fiscal year at $2,401,741, primarily due to continued increases in fare box revenues. 199
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Management's Discussion and Analysis
General Fund Budgetary Highlights
Original budget compared to final budget. There were a few budget adjustments greater than $50,000 during the fiscal year. Budget adjustments greater than $50,000 are listed below:
Expenditure Budget Adjustments RSI Schedule Initial
> $50k Classification Budget Final Budget Difference
Solvang Chamber of Commerce Tourism
Funding $ 50,000 $ 100,000 $ 50,000
Temporary Agency Services Administration $ 5,000 $ 61,735 $ 56,735 Public
Professional Services Works/Admin. $ 70,000 $ 328,376 $ 258,376 Roads/Custodial Operations Public Works $ 196,000 $ 1,034,120 $ 838,120 Total $ 1,203,231
Final budget compared to actual results. The most significant differences (greater than $100,000) between estimated revenues and actual revenues were as follows:
Final Budgeted Actual
Revenue Source Revenues Revenues Difference
Transient Occupancy Tax $ 5,192,010 $ 6,311,438 $ 1,119,428 Sales Tax $ 1,954,600 $ 2,517,643 $ 563,043
Property Taxes $ 1,474,254 $ 1,754,910 $ 280,656
Miscellaneous $ 18,000 $ 280,700 $ 262,700
Notable differences, between estimated expenditures and actual expenditures by function were as follows:
Final Budgeted Actual
Expenditures Expenditures Expenditures Difference
General administration $ 3,285,987 $ 2,863,503 $ (422,484) Community Development $ 989,690 $ 829,798 $ (159,892)
Culture and Recreation $ 1,176,516 $ 1,147,486 $ (29,030) Public Works $ 3,383,338 $ 2,509,616 $ (873,722)
Public Safety $ 2,519,496 $ 2,366,496 $ (153,000)
Most of these differences were due to lower-than-expected legal fees, salaries and contracted services.
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Management's Discussion and Analysis
Capital Asset and Debt Administration
Capital assets. The City of Solvang's investment in capital assets for its governmental and business-type activities as of June 30, 2023, amounts to $28,470,701 (net of accumulated depreciation). This investment in capital assets includes land, buildings, machinery, equipment, vehicles, park facilities, roads, highways, bridges, and the wastewater treatment plant. Investment in capital assets increased by 6.02%. Major capital asset events (greater than $1 OOK) during fiscal year 2022-23 include the following:
FY 2022-23 Slurry Seal Prnject $466,012
WWTP Upgrade Phase 2 (In Progress) $206,248
Public Works Lift Truck $205,048
Additional information on the City of Solvang's capital assets can be found in Note 6 on pages 75- 76 of this report.
Long-term Debt. Under insurance arrangements, the City is self-insured for the first $50,000 for each workers' compensation claim, $20,000 for each general liability claim, and $5,000 per property damage claim. The statement of net position also shows no liability for 2023 for estimated claim obligations and has no current obligation for 2024. This liability was fully funded and paid in 2023, and there were no pending claims at the end of the fiscal year.
The City has a take or pay water purchase agreement with the Santa Ynez River Water Conservation District, Improvement District No. 1 (ID No. I), for State Water, where the City must make annual payments for the State Water whether or not water is delivered. ID No 1. has pledged its water sale revenue from Solvang for repayment of its long-term debt. Solvang has an ongoing commitment to buy water from ID No 1, but the bonded debt is that of ID No. 1 and not the City of Solvang. The agreement requires annual payments until 2035.
Additional information on the City's long-term debt can be found starting on page 77 of the notes to the financial statements
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Management's Discussion and Analysis
Economic Factors and Next Year's Budget and Rates
The following economic factors currently affect the City of Solvang and were considered in developing the 2022-24 two year fiscal budget:
• In June 2023, the City Council adopted a General Fund budget with revenues greater than budgeted expenses. This was, in part, due to increased budgeted revenues of Transient Occupancy and Sales Taxes.
• In 2022, an annual increase in water and wastewater rates were approved and scheduled for each July from fiscal year 2022-23 through fiscal year 2026-2027. The additional funds generated by the increase are intended to support maintenance and capital replacement costs, as well as provide adequate funding of reserves.
• As property values slowly increase, the taxable assessed value as a percentage of estimated actual value in property assessments increases. This contributes to the increase in City revenues.
• The City is receiving higher interest revenues than were budgeted for from our investments in the State Wide Local Agency Investment Fund. Interest rates are still on the incline currently, and this will be addressed during the budget process for FY 2024-26. • Increases are expected in pension and other post-employment benefit costs. The City's pension liabilities will continue to climb over the next 5-7 years as CalPERS adjusts their methodology and assumptions, which also increases employer contributions. Staff continue to review and evaluate pension costs and work with CalPERS on possible funding strategies. • The City of Solvang relies heavily on tourism, with over 1.5 million visitors annually, requiring daily services for residents and non-residents alike.
Requests for Information
This financial report is designed to provide a general overview of the City of Solvang' s finances for anyone with an interest in the government's finances. If you have questions about this report or need additional financial information, contact the Administrative Services Director at:
City of Solvang
1644 Oak Street
Solvang, California 93463
(805) 688-5575
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203
BASIC
FINANCIAL STATEMENTS
204
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205
GOVERNMENT-WIDE
FINANCIAL STATEMENTS
206
City of Solvang
Statement of Net Position
June 30, 2023
ASSETS
Current assets:
Cash and investments
Taxes receivable
Accounts receivable
Due from other government
Lease receivable
Interest receivable
Deposits
Prepayments
Total current assets
Noncurrent assets:
Loans receivable
Lease receivable
Capital assets:
Capital assets not being depreciated
Capital assets being depreciated, net
Total capital assets
Total noncurrent assets
Total assets
DEFERRED OUTFLOWS OF RESOURCES
Deferred outflows - pension
Deferred outflows - OPEB
Total deferred outflows of resources
See accompanying Notes to Basic Financial Statements.
Primary Government
Governmental Business-Type
Activities Activities Total
$ 20,724,945 $ 8,689,256 $ 29,414,201
8,949 8,949
1,897,694 1,330,457 3,228,151
76,502 76,502
9,516 9,516
154,876 64,242 219,118
636,134 636,134
16,049 2,041,516 2,057,565
22,879,015 12,771,121 35,650,136
19,179 19,179
174,086 174,086
2,764,514 610,040 3,374,554
12,137,489 12,958,658 25,096,147
14,902,003 13,568,698 28,470,701
14,921,182 13,742,784 28,663,966
37,800,197 26,513,905 64,314,102
1,752,971 584,323 2,337,294
292,223 97,408 389,631
2,045,194 681,731 2,726,925
207
Primary Government
Governmental Business-Type
Activities Activities Total
LIABILITIES
Current liabilities:
Accounts payable 448,654 413,504 862,158
Deposits 91,745 91,745
Unearned advances 29,131 29,131
Compensated absences, due within one year 30,000 30,000 60,000 Total current liabilities 599,530 443,504 1,043,034
Noncurrent liabilities:
Compensated absences, due in more than one year 51,112 39,506 90,618 Net other post employment benefit liability 987,601 329,199 1,316,800 Net pension liability 4,202,378 1,400,793 5,603,171
Total noncurrent liabilities 5,241,091 1,769,498 7,010,589 Total liabilities 5,840,621 2,213,002 8,053,623
DEFERRED INFLOWS OF RESOURCES
Deferred inflows - pension 403,623 134,541 538,164
Deferred inflows - OPEB 328,196 109,399 437,595
Deferred inflows - leases 166,393 166,393
Total deferred inflows of resources 731,819 410,333 1,142,152
NET POSITION
Net investment in capital assets 14,902,003 13,568,698 28,470,701 Restricted for:
Highways and streets 790,502 790,502
Capital improvements and other 2,708,071 2,708,071
Total restricted 3,498,573 3,498,573
Umestricted 14,872,375 11,003,603 25,875,978
Total net position $ 33,272,951 $ 24,572,301 $ 57,845,252 See accompanying Notes to Basic Financial Statements. 208 City of Solvang
Statement of Activities
For the year ended June 30, 2023
Functions/Programs Expenses
City Government:
Governmental activities:
General government $ 2,805,808
Public safety 2,373,664
Culture and recreation 1,093,712
Community development 808,250
Public works 3,179,379
Total governmental activities 10,260,813
Business-type activities:
Water 4,303,277
Wastewater 2,402,724
Transit 1,134,410
Total business-type activities 7,840,411
Total primary government $ 18,101,224
See accompanying Notes to Basic Financial Statements.
Program Revenues
Operating Capital
Charges for Grants and Grants and
Services Contributions Contributions
$ 760,807 $ 933,125 $
5,190
143,851 1,000
331,821 110,907
319,713 690,727 155,723
1,561,382 1,735,759 155,723
5,112,107 43,735
1,953,239 589,140
56,068 1,236,946
7,121,414 1,826,086 43,735
$ 8,682,796 $ 3,561,845 $ 199,458
General Revenues:
Taxes:
Property taxes
Sales taxes
Transient occupancy taxes
Other taxes
Total taxes
Investment earnings
Miscellaneous
Transfers
Total general revenues and transfers
Change in net position
Net position - beginning of year
Net position - end of year
Total
$ 1,693,932
5,190
144,851
442,728
1,166,163
3,452,864
5,155,842
2,542,379
1,293,014
8,991,235
$ 12,444,099
209
Net (Expense) Revenue
and Changes in Net Position
Primary Government
Governmental Business-Type
Activities Activities Total
$ (1,111,876) $ - $ (1,111,876)
(2,368,474) (2,368,474)
(948,861) (948,861)
(365,522) (365,522)
(2,013,216) (2,013,216)
(6,807,949) (6,807,949)
852,565 852,565
139,655 139,655
158,604 158,604
1,150,824 1,150,824
(6,807,949) 1,150,824 (5,657,125)
1,754,910 1,754,910
2,517,643 2,517,643
6,311,438 6,311,438
345,486 345,486
10,929,477 10,929,477
379,069 199,569 578,638
279,700 279,700
(93,000) 93,000
11,495,246 292,569 11,787,815
4,687,297 1,443,393 6,130,690
28,585,654 23,128,908 51,714,562
$ 33,272,951 $ 24,572,301 $ 57,845,252
See accompanying Notes to Basic Financial Statements. 210 This page intentionally left blank
211
FUND
FINANCIAL STATEMENTS
Governmental Fund Financial Statements
Proprietary Fund Financial Statements
Fiduciary Fund Financial Statements
212
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213
GOVERNMENTAL FUND FINANCIAL STATEMENTS
General Fund is the City's primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund.
Impact Fee Special Revenue Fund accounts for impact fees paid by developers restricted for various capital improvement projects.
City Projects Capital Projects Fund accounts for monies committed and restricted for City capital projects.
214
City of Solvang
Balance Sheet
Governmental Funds
June 30, 2023
ASSETS
Cash and investments
Receivables:
Taxes receivable
Accounts receivable
Due from other government
Interest receivable
Due from other funds
Prepaid items
Loans and notes receivables
Total assets
LIABILITIES AND
FUND BALANCES
Liabilities:
Accounts payable
Due to other funds
Deposits payable
Unearned revenues
Total liabilities
Fund Balances:
Nonspendable (Prepaid items and loans)
Restricted for:
Recycling
Highways and streets
Park improvements
Drainage
Affordable housing
Tennis facilities
Total restricted
Committed to:
Emergencies
Total committed
Unassigned
Total fund balances
Total liabilities and fund balances
General Fund
$ 16,127,200
8,949
1,749,042
76,502
113,214
1,776
16,049
1,341
$ 18,094,073
$ 327,333
91,745
29,131
448,209
17,390
16,947
9,368
26,315
7,266,377
7,266,377
10,335,782
17,645,864
$ 18,094,073
See accompanying Notes to Basic Financial Statements.
Major Funds
Impact Fee City Projects Non-Major Total
Special Capital Governmental Governmental
Revenue Fund Projects Fund Funds Funds
$ 1,535,471 $ 95,184 $ 1,746,168 $ 19,504,023
8,949
148,652 1,897,694
76,502
12,119 20,047 145,380
1,776
16,049
17,838 19,179
$ 1,565,428 $ 95,184 $ 1,914,867 $ 21,669,552
$ - $ 113,517 $ 7,804 $ 448,654
1,776 1,776
91,745
29,131
113,517 9,580 571,306
17,390
16,947
790,502 1,905,287 2,695,789
46,489 46,489
287,964 287,964
442,016 442,016
9,368
1,566,971 1,905,287 3,498,573
7,266,377
7,266,377
(1,543) (18,333) 10,315,906
1,565,428 (18,333) 1,905,287 21,098,246
$ 1,565,428 $ 95,184 $ 1,914,867 $ 21,669,552
215
City of Solvang
Reconciliation of the Governmental Funds Balance Sheet
to the Government-Wide Statement of Net Position
June 30, 2023
Total Fund Balances - Total Governmental Funds
Amounts reported for governmental activities in the statement of net position are different Capital assets used in governmental activities are not current financial resources and therefore are not reported in the funds
The assets and liabilities of the internal service fund are included in the governmental activities in the statement of net position
Pension actuarial deferrals and certain employer contributions are reported as deferred inflows and outflows of resources and are, therefore, not reported in the funds Net pension liability (NPL) obligations are not due and payable in the current period and are not reported in the funds
OPEB actuarial deferrals and certain employer contributions are reported as deferred inflows and outflows of resources and are, therefore, not reported in the funds The net OPEB liability is not due and payable in the current period and is therefore not reported in the funds
Some liabilities, including compensated absences, and claims are not due and payable in the current period and are therefore not reported in the funds Net Position of Governmental Activities
See accompanying Notes to Basic Financial Statements.
$ 21,098,246
14,690,278
1,442,143
1,349,348
(4,202,378)
(35,973)
(987,601)
(81,112)
33,272,951
216
City of Solvang
Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds
For the year ended June 30, 2023
Major Funds
Impact Fee City Projects Non-Major Total
Special Capital Governmental Governmental
General Fund Revenue Fund Projects Fund Funds Funds
REVENUES:
Property taxes $ 1,754,910 $ - $
- $- $ 1,754,910
Sales taxes 2,517,643 2,517,643
Transient occupancy taxes 6,311,438 6,311,438
Other taxes 345,486 345,486
Special assessments 219,025 219,025
Licenses and permits 278,418 278,418
Fines and forfeits 50 50
Intergovernmental 1,069,199 846,450 1,915,649
Interest 276,615 28,731 48,416 353,762
Charges for services 1,028,743 5,190 4,789 1,038,722
Miscellaneous 280,700 280,700
Total revenues 13,863,202 33,921 1,118,680 15,015,803
EXPENDITURES:
Current:
General government 2,863,503 2,863,503
Public safety 2,366,496 2,366,496
Culture and recreation 1,147,486 1,147,486
Community development 829,798 829,798
Public works 2,452,471 199,413 2,651,884
Capital outlay 57,145 2,121,753 3,027 2,181,925
Total expenditures 9,716,899 2,121,753 202,440 12,041,092 REVENUES OVER (UNDER) EXPENDITURES 4,146,303 33,921 (2,121,753) 916,240 2,974,711 OTHER FINANCING SOURCES (USES):
Transfers in 388,171 2,092,319 2,480,490
Transfers out (1,439,859) (843,631) (2,283,490)
Total other financing sources (uses) (1,051,688) 2,092,319 (843,631) 197,000 Net change in fund balances 3,094,615 33,921 (29,434) 72,609 3,171,711 FUND BALANCES:
Beginning of year 14,551,249 1,531,507 11,101 1,832,678 17,926,535 End of year $ 17,645,864 $ 1,565,428 $ (18,333) $ 1,905,287 $ 21,098,246 See accompanying Notes to Basic Financial Statements. 217 City of Solvang
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Government-Wide Statement of Activities For the year ended June 30, 2023
Net Change in Fund Balances -Total Governmental Funds
Amounts reported for governmental activities in the Statement of Activities were different Governmental funds report capital outlays as expenditures, however, in the statement of activities, the cost of those assets are allocated over their estimated useful lives as depreciation expense. This is the amount by which capital outlays of $1,844,696 exceed depreciation ($881,861) in the current period.
Decreases in liabilities for other post employment benefits (OPEB) and other related amounts do not provide current financial resources and are therefore not reported in the governmental fund statements.
Changes in the net pension liability and related deferred amounts do not use or provide current financial resources and are reported in the statement of activities, but not in the governmental fund statements.
Some expenses in the statement of activities for noncurrent liabilities such as long-term compensated absences do not require the use of or provide current financial resources and, therefore, are not reported as expenditures in the governmental funds Internal service funds are consolidated by charging additional amounts or reducing charges to participating governmental activities to completely cover the internal service fund's costs Change in Net Position of Governmental Activities
See accompanying Notes to Basic Financial Statements.
$ 3,171,711
962,835
128,361
425,858
95,100
(96,568)
$ 4,687,297
218
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219
PROPRIETARY FUND FINANCIAL STATEMENTS
Water Service Enterprise Fund accounts for the activities associated with providing water services.
Wastewater Enterprise Fund accounts for the wastewater treatment plant and wastewater pumping stations and collection systems.
Transit Enterprise Fund is used to account for transit operations.
Vehicle/Equipment Replacement Internal Service Fund is used to account for replacement costs of City vehicles and equipment and accumulate resources for replacement assets. 220
City of Solvang
Statement of Net Position
Proprietary Funds
June 30, 2023
Current assets:
Cash and investments
Accounts receivable
Interest receivable
Lease receivable
Deposits
Prepayments
Total current assets
Noncurrent assets:
Lease receivable
Capital assets:
ASSETS
Capital assets not being depreciated
Capital assets being depreciated
Total capital assets
Total noncurrent assets
Total assets
DEFERRED OUTFLOWS OF RESOURCES
Deferred outflows - pension
Deferred outflows - OPEB
Total deferred outflows of resources
LIABILITIES
Current liabilities:
Accounts payable and other
Compensated absences - due within one year
Total current liabilities
Noncurrent liabilities:
Compensated absences - due in more than one year
Net other postemployment benefit liability
Net pension liability
Total noncurrent liabilities
Total liabilities
DEFERRED INFLOWS OF RESOURCES
Deferred inflows - pension
Deferred inflows - OPEB
Deferred inflows - leases
Total deferred inflows of resources
NET POSITION
Net investment in capital assets
Unrestricted
Total net position
See accompanying Notes to Basic Financial Statements.
Enterprise Funds
Water Wastewater
$ 5,353,574 $ 2,115,291
599,473 238,275
38,937 16,339
9,516
632,101 836
2,035,713 5,803
8,669,314 2,376,544
174,086
210,917 399,123
5,752,384 6,468,073
5,963,301 6,867,196
6,137,387 6,867,196
14,806,701 9,243,740
233,729 350,594
38,963 58,445
272,692 409,039
316,284 35,497
15,000 15,000
331,284 50,497
8,307 31,199
131,680 197,519
560,317 840,476
700,304 1,069,194
1,031,588 1,119,691
53,817 80,724
43,760 65,639
166,393
263,970 146,363
5,963,301 6,867,196
7,820,534 1,519,529
$ 13,783,835 $ 8,386,725
221
$
$
Enterprise Funds
Transit Total
1,220,391 $ 8,689,256
492,709 1,330,457
8,966 64,242
9,516
3,197 636,134
2,041,516
1,725,263 12,771,121
174,086
610,040
738,201 12,958,658
738,201 13,568,698
738,201 13,742,784
2,463,464 26,513,905
584,323
97,408
681,731
61,723 413,504
30,000
61,723 443,504
39,506
329,199
1,400,793
1,769,498
61,723 2,213,002
134,541
109,399
166,393
410,333
738,201 13,568,698
1,663,540 11,003,603
2,401,741 $ 24,572,301
Vehicle/Equipment
Replacement
Internal Service
Fund
$ 1,220,922
9,496
1,230,418
211,725
211,725
211,725
1,442,143
211,725
1,230,418
$ 1,442,143
See accompanying Notes to Basic Financial Statements. 222 City of Solvang
Statement of Revenues, Expenses and Changes in Fund Net Position Proprietary Funds
For the year ended June 30, 2023
OPERATING REVENUES:
Sales of water
Service fees
Miscellaneous
Total operating revenues
OPERATING EXPENSES:
Salaries and benefits
Purchased power
Transit operator
Services and supplies
Joint operating expenses
Depreciation expense
Total operating expenses
OPERA TING INCOME (LOSS)
NONOPERA TING REVENUES (EXPENSES):
Grant revenue
Operating subsidies
Gain on sale of capital assets
Interest and investment revenue
Total nonoperating revenues (expenses)
INCOME (LOSS) BEFORE CONTRIBUTIONS
AND TRANSFERS
Transfers in
Transfers out
Capital contributions
Net contributions and transfers
Change in net position
NET POSITION:
Beginning of year
End of year
See accompanying Notes to Basic Financial Statements.
Enterprise Funds
Water Wastewater
$ 5,079,051 $
1,942,183
33,056 11,056
5,112,107 1,953,239
643,005 861,039
151,540 211,604
1,079,072 835,444
2,075,538
354,443 494,637
4,303,598 2,402,724
808,509 (449,485)
589,140
321
129,772 35,629
130,093 624,769
938,602 175,284
90,000
43,735
133,735
1,072,337 175,284
12,711,498 8,211,441
$ 13,783,835 $ 8,386,725
223
$
Enterprise Funds
Transit Total
Vehicle/Equipment
Replacement
Internal Service
Fund
$ 5,079,051 $
56,068
56,068
702,829
333,832
97,749
1,134,410
(1,078,342)
1,236,946
34,168
1,271,114
192,772
3,000
3,000
195,772
2,205,969
1,998,251
44,112
7,121,414
1,504,044
363,144
702,829
2,248,348
2,075,538
946,829
7,840,732
(719,318)
589,140
1,236,946
321
199,569
2,025,976
1,306,658
93,000
43,735
136,735
1,443,393
23,128,908
217,347
217,347
49,222
49,222
168,125
25,307
25,307
193,432
(290,000)
(290,000)
(96,568)
1,538,711
$ 2,401,741 $ 24,572,301 ==========
$ 1,442,143
See accompanying Notes to Basic Financial Statements. 224 City of Solvang
Statement of Cash Flows
Proprietary Funds
For the year ended June 30, 2023
CASH FLOWS FROM OPERA TING ACTIVITIES:
Receipts from customers
Payments to suppliers
Payments to other funds for services
Payments from other funds for services
Payments for employees and benefits
Net cash provided by (used in) operating activities
CASH FLOWS FROM NONCAPIT AL FINANCING ACTIVITIES:
Transfers in
Transfers out
Grants and operating subsidies
Net cash provided by (used in) noncapital financing activities CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES:
Proceeds from sale of capital assets
Capital contributions
Purchases of capital assets
Net cash provided by (used in) capital and related financing activities CASH FLOWS FROM INVESTING ACTIVITIES:
Investment loss
Net cash provided by (used in) investing activities
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
CASH AND INVESTMENTS - Beginning of year
CASH AND INVESTMENTS - End of year
RECONCILIATION OF OPERA TING INCOME TO NET
CASH PROVIDED BY OPERATING ACTIVITIES:
Operating income (loss)
Adjustments to reconcile operating income
to net cash provided by operating activities:
Depreciation
Changes in assets and liabilities:
Decrease (increase) in receivables and related amounts
Decrease (increase) in deposits
Decrease (increase) in prepayments
Increase (decrease) in accounts payable
Increase (decrease) in compensated absences
Increase (decrease) in net OPEB liability and related deferred amounts Increase (decrease) in net pension liability and related deferred amounts Total adjustments
Net cash provided by operating activities
See accompanying Notes to Basic Financial Statements.
Enterprise Funds
Water Wastewater
$ 5,180,814 $ 1,928,324
(2,889,633) (835,531)
(278,301) (173,145)
{734,703} {974,111}
1,278,177 (54,463)
90,000
589,140
90,000 589,140
321
43,735
{896,472} {254,049}
(852,416) (254,049)
99,188 22,804
99,188 22,804
614,949 303,432
4,738,625 1,811,859
$ 5,353,574 $ 2,115,291
$ 808,509 $ (449,485)
354,443 494,637
68,707 (24,915)
(119,288) 64,615
257,504 (26,243)
(17,803) (2,227)
(17,115) (25,673)
{56,780} {85,172}
469,668 395,022
$ 1,278,177 $ {54,463}
225
Vehicle/Equipment
Enterprise Funds Replacement
Internal Service
Transit Total Fund
$ 56,068 $ 7,165,206 $
(1,012,779) (4,737,943)
(58,601) (510,047)
217,347
{1,708,814}
(1,015,312) 208,402 217,347
3,000 93,000
(290,000)
1,112,614 1,701,754
1,115,614 1,794,754 (290,000)
321
43,735
{500,000} {1,650,521}
(500,000) (1,606,465)
27,956 149,948 17,736
27,956 149,948 17,736
(371,742) 546,639 (54,917)
1,592,133 8,142,617 1,275,839
$ 1,220,391 $ 8,689,256 $ 1,220,922
$ (1,078,342) $ (719,318) $ 168,125
97,749 946,829 49,222
43,792
(3,047) (3,047)
131 (54,542)
(31,803) 199,458
(20,030)
(42,788)
{141,952}
63,030 927,720 49,222
$ {1,015,312} $ 208,402 $ 217,347
See accompanying Notes to Basic Financial Statements. 226 This page intentionally left blank
227
FIDUCIARY FUND FINANCIAL STATEMENTS
Custodial Fund accounts for monies collected and held for the Santa Ynez Business Improvement District. 228
City of Solvang
Statement of Fiduciary Net Position
Fiduciary Funds
June 30, 2023
ASSETS
Cash and investments
Assessments receivable
Total assets
NET POSITION
Restricted for tourism
Total net position
See accompanying Notes to Basic Financial Statements.
$
$
Custodial
Fund
37,628
60,957
98,585
98,585
98,585
229
City of Solvang
Statement of Changes in Fiduciary Net Position
Fiduciary Funds
For the year ended June 30, 2023
ADDITIONS:
Special assessments
Total additions
DEDUCTIONS:
Pass-through payments
Total Deductions
Change in net position
NET POSITION:
Beginning of year
End of year
See accompanying Notes to Basic Financial Statements.
$
$
Custodial
Fund
557,204
557,204
559,947
559,947
(2,743)
101,328
98,585
230
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231
NOTES TO BASIC
FINANCIAL STATEMENTS
232
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233
City of Solvang
Notes to the Basic Financial Statements
For the year ended June 30, 2023
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The basic financial statements of the City of Solvang, California (City) have been prepared in conformity with generally accepted accounting principles (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 of Solvang is a municipal corporation governed by an elected five-member City Council. The accompanying financial statements present the government and its component units, entities for which the government is considered to be financially accountable.
The Solvang Joint Powers Financing Authority is a legally separate corporate entity for which the City is financially accountable and is governed by the elected City Council. The Authority was formed to provide a method of financing public improvements. The financial activities of the Authority are blended with those of the City and are reported in the City's governmental funds, and as capital assets of the City and debt obligations of the City.
Separate financial statements are not available for the Solvang Joint Powers Financing Authority.
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 with its own self-balancing set of accounts that comprise its assets, deferred outflows of resources, liabilities, deferred inflows of resources, fund equity, revenues and expenditures or expenses. These funds are established for the purpose of carrying out specific activities or certain objectives in accordance with specific regulations, restrictions or limitations. Governmental resources are allocated to and accounted for in individual funds based upon the purposes 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. These statements present summaries of Governmental and Business-Type Activities for the City accompanied by a total column.
The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met.
234
City of Solvang
Notes to the Basic Financial Statements
For the year ended June 30, 2023
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED B. Basis of Accounting and Measurement Focus, Continued Government-Wide Financial Statements, Continued
These financial statements are presented on an "economic resources" measurement focus and the accrual basis of accounting. Accordingly, all of the City's assets, deferred inflows/ outflows of resources, and liabilities, including capital assets, as well as 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 liabilities are incurred.
Certain types of transactions reported as program revenues for the City are reported in three categories:
• Charges for services
• Operating grants and contributions
• Capital grants and contributions
Certain eliminations have been made in regards 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 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/ from other funds
• Transfers in/ out
The City applies all applicable GASB pronouncements including all NCGA Statements and Interpretations currently in effect.
Governmental Fund Financial Statements
Governmental fund financial statements include a Balance Sheet and a Statement of Revenues, Expenditures and Changes in Fund Balances for all major governmental funds and non-major funds aggregated. An accompanying schedule is presented to reconcile and explain the differences in net position as presented in these statements to the net position presented in the government-wide financial statements. The City has presented all major funds that meet specific qualifications.
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 sheets. The Statement of Revenues, Expenditures and Changes in Fund Balances present increases (revenues 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.
235
City of Solvang
Notes to the Basic Financial Statements
For the year ended June 30, 2023
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED B. Basis of Accounting and Measurement Focus, Continued Governmental Fund Financial Statements, Continued
The City reports the following funds as major governmental funds of the City.
The General Fund is the government's primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund.
The Impact Fee Fund is a special revenue fund used to account for impact fees restricted by law to use only for the specific purpose of the fee.
The City Capital Projects Fund is a capital projects fund used to account for monies that are restricted or committed for capital projects.
Revenues are recorded when received in cash, except that revenues subject to accrual (generally those received 60 days after year-end) are recognized when due. The primary revenue sources that have been treated as susceptible to accrual by the City are property taxes, taxpayer-assessed tax revenues (sales taxes, transient occupancy taxes, franchise taxes, etc.), grant revenues and earnings on investments.
Expenditures are recorded in the accounting period in which the related fund liability is incurred.
The Reconciliation of the Fund Financial Statements to the Government-Wide Financial Statements is provided.
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.
A column representing internal service funds is also presented in these statements. However, internal service balances and activities have been combined with the governmental activities in the GovernmentWide Financial Statements.
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 present 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 a liability is incurred.
Operating revenues in the proprietary funds are those revenues that are generated from the primary operations of the fund. All other revenues 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.
236
City of Solvang
Notes to the Basic Financial Statements
For the year ended June 30, 2023
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED B. Basis of Accounting and Measurement Focus, Continued Proprietary Fund Financial Statements, Continued
The City reports the following major proprietary funds:
The Water Enterprise Fund accounts for the operations of the City's water treatment and distribution system.
The Wastewater Enterprise Fund accounts for the operation of the City's wastewater treatment plant and collection facilities.
The Transit Enterprise Fund accounts for the operation of the City's transit activities.
Internal service fund balances and activities have been combined with governmental activities in the Government-Wide Financial Statements, and are comprised of the following fund:
Vehicle/Equipment Replacement Fund accounts for charges to the City departments for funding and acquisition of replacement vehicles and equipment.
Fiduciary Fund Financial Statements
Fiduciary fund financial statements consist of a Statement of Fiduciary Net Position. The City has one type of fiduciary fund, a custodial fund. Custodial funds are used to account for fiduciary activities not required to be reported in an investment trust fund, pension trust fund, or private-purpose trust fund.
Fiduciary 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 Fiduciary Net Position. The Statement of Changes in Fiduciary Net Position present increases and decreases in total fiduciary net position The City reported the following custodial fund:
Santa Ynez Valley Tourism Business Improvement District Custodial Fund - accounts for monies held by the City for the Santa Ynez Valley Tourism Business Improvement District.
C. Cash, Cash Equivalents, and Investments
The City pools cash resources from all funds in order to facilitate the management of cash. The balance in the pooled cash account is available to meet current operating requirements. Cash in excess of current requirements is invested in various interest-bearing accounts and other investments for varying terms.
In accordance with GASB Statement No. 40, Deposit and Investment Disclosures (Amendment of GASB No. 3), certain disclosure requirements for Deposits and Investment Risks were made in the following areas:
• Interest Rate Risk
• Credit Risk
o Overall
o Custodial Credit Risk
In addition, other disclosures are specified including use of certain methods to present deposits and investments, highly sensitive investments, credit quality at year-end, and other disclosures. 237
City of Solvang
Notes to the Basic Financial Statements
For the year ended June 30, 2023
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED C. Cash, Cash Equivalents, and Investments, Continued
In accordance with GASB Statement No. 31, Accounting and Financial Reporting for Certain Investments and for External Investment Pools, highly liquid money 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. The City categorizes the fair value measurements of its investments based on the hierarchy established by generally accepted accounting principles. The fair value hierarchy, which has three levels, is based on the valuation inputs used to measure an asset's fair value: Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs. The City does not have any investments that are measured using Level 3 inputs.
The City participates in an investment pool managed by the State of California entitled Local Agency Investment Fund (LAIF) which has invested a portion of the pooled 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 AssetBacked Securities are subject to market risk as to the change in interest rates.
Cash equivalents are considered amounts in demand deposits and short-term investments with a maturity date within three months of the date acquired by the City and are presented as "Cash and Investments" in the accompanying Basic Financial Statements.
For the purpose of the statement of cash flows, the City considers all pooled cash and investments (consisting of cash and investments and restricted cash and investments) held by the City as cash and cash equivalents because the pool is used essentially as a demand deposit account from the standpoint of the funds. The City also considers all non-pooled cash and investments ( consisting of cash with fiscal agent and restricted cash and investments held by fiscal agent) as cash and cash equivalents because investments meet the criteria for cash equivalents defined above.
D. Receivables and Payables
Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either "due to/from other funds" (i.e., the current portion of interfund loans) or "advances to/from other funds" (i.e., the non-current portion of interfund loans). All other outstanding balances between funds are reported as "due to/ from other funds." Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as "internal balances." Advances between funds, as reported in the fund financial statements, are offset by a fund balance reserve account in applicable government funds to indicate that they are not available for appropriation and are not expendable available financial resources.
All trade and property tax receivables are not shown net of an allowance for uncollectible amounts. 238
City of Solvang
Notes to the Basic Financial Statements
For the year ended June 30, 2023
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED D. Receivables and Payables, Continued
Property taxes are levied as of March 1 on property values assessed as of the same date. State statutes provide that the property tax rate be limited generally to one percent of market value, be levied by only the County, and be shared by applicable jurisdictions. The County of Santa Barbara collects the taxes and distributes them to taxing jurisdictions on the basis of assessed valuations subject to voterapproved debt. Property taxes are due on November 1 and March 1, and become delinquent on December 10 and April 10. The City receives property taxes pursuant to an arrangement with the County known as the "Teeter Plan". Under the plan, the County assumes responsibility for the collection of delinquent taxes and pays the full allocation to the City. The City recognizes property tax revenues in the fiscal year in which they are due to the City.
E. Leases - Lessor
The City is a lessor for a noncancellable lease of land. The City recognizes a lease receivable and a deferred inflow of resources in the government-wide and governmental fund financial statements.
At the commencement of a lease, the City initially measures the lease receivable at the present value of payments expected to be received during the lease term. Subsequently, the lease receivable is reduced by the principal portion of lease payments received. The deferred inflow of resources is initially measured as the initial amount of the lease receivable, adjusted for lease payments received at or before the lease commencement date. Subsequently, the deferred inflow of resources is recognized as revenue over the life of the lease term.
Key estimates and judgments include how the City determines (1) the discount rate it uses to discount the expected lease receipts to present value, (2) lease term, and (3) lease receipts. • The City uses its estimated incremental borrowing rate as the discount rate for leases. • The lease term includes the noncancellable period of the lease. Lease receipts included in the measurement of the lease receivable is composed of fixed payments from the lessee.
The City monitors changes in circumstances that would require a remeasurement of its lease, and will remeasure the lease receivable and deferred inflows of resources if certain changes occur that are expected to significantly affect the amount of the lease receivable.
E. Inventories and Prepaid Items
All inventories are valued at cost using the first-in/ first-out (FIFO) method. Inventories of governmental funds are recorded as expenditures when used or consumed.
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements. Such prepayments are accounted for using the consumption method in the governmental funds. 239
City of Solvang
Notes to the Basic Financial Statements
For the year ended June 30, 2023
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED F. Capital Assets
Capital assets include property, plant, equipment, and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items). They are reported in the applicable governmental-type or business-type activities columns in the government-wide financial statements. Capital assets are defined by the government as assets with an initial, individual cost of more than $5,000 ($100,000 for infrastructure type assets) and an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets, donated works of art and similar items, and capital assets received in a service concession arrangement are reported at acquisition value. Under the GASB 34 Implementation Rules, the City is a Phase 3 entity and was not required to record infrastructure assets existing or acquired prior to July 1, 2002 at the date these new financial reporting standards were implemented. The City has not recorded such assets. The costs of normal maintenance and repairs that do not add to the value of asset or materially extend assets lives are not capitalized.
Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of the business-type activities is included as part of the capitalized value of the assets constructed. Property, plant, and equipment of the City are depreciated using the straight line method over the following estimated useful lives:
G. Compensated Absences
Assets
Buildings and improvements
Public domain infrastructure
System infrastructure
Vehicles and equipment
Years
7-50
50 50
5-10
It is the government's policy to permit employees to accumulate earned but unused vacation and sick pay benefits. There is a liability for a portion of unpaid accumulated sick leave since the City does have a policy to pay certain amounts when employees separate from service with the City. All vacation pay and applicable sick leave is accrued when incurred in the government-wide and proprietary fund financial statements. A liability for these amounts is reported in the governmental funds only if they have matured, for example, as a result of employee resignations and retirements.
H. Long-tenn Obligations
In the government-wide financial statements, and the 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. 240
City of Solvang
Notes to the Basic Financial Statements
For the year ended June 30, 2023
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED I. 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 is attributed to the acquisition, construction, or improvement of the assets.
Restricted - This amount is restricted by external creditors, grantors, contributors, or laws or regulations of governments.
Unrestricted - This amount is all net position that do not meet the definition of "net investment in capital assets" or "restricted net position" as defined above.
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.
J. Fund Balances - Governmental Funds
Fund balances for governmental funds are reported in classifications based primarily on the extent to which the City is bound to honor constraints about the specific purposes for which amounts in those funds can be spent. These classifications include (1) nonspendable, (2) restricted, (3) committed, (4) assigned and (5) unassigned amounts.
Nonspendable amounts generally are items not expected to be converted into cash such as inventories and prepaid items.
Restricted amounts include those where constraints placed on the uses of the resources are externally imposed by grantors, contributors, other governments or by laws or regulations.
Committed amounts are those that can only be used for a specific purpose as determined by the City Council. Such committed amounts may be redeployed for other uses only by the direction of the City Council. Commitments are established, modified, or rescinded by the City Council adopting such action by resolution. The City's reported committed fund balance for emergencies was established by City resolution and can only be accessed during a significant decrease in revenues as defined per the City's policy.
Assigned amounts are fund balance amounts constrained by the City's intent to be used for specific purposes as determined by the City Manager or City Administrative Services Director, Unassigned fund balance amounts are the residual amounts reported in only the general fund.
When expenditures are incurred for which both restricted and unrestricted (committed, assigned or unassigned) amounts are available, the City considers restricted amounts to have been spent first. When expenditures are incurred for which any class of unrestricted fund balance could be used, the City considers committed amounts would be reduced first, followed by assigned amounts, and then unassigned amounts.
241
City of Solvang
Notes to the Basic Financial Statements
For the year ended June 30, 2023
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED K. Pensions
For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the State of California Public Employees Retirement System (PERS) and additions to or deductions from the PERS fiduciary net position have been determined on the same basis as they are reported by the PERS. 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.
L. Postemployment Benefits Other Than Pensions (OPEB)
For purposes of measuring the net OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net position of the City's OPEB Retiree Benefits Plan and additions to/deductions from the Plan's fiduciary net position have been determined on the same basis as they are reported by the Plan. Investments are stated at fair value. For this purpose, the City's Plan recognizes benefit payments when due and payable in accordance with the benefit terms. Investments are reported at fair value, except for money market investments and participating interest-earning investment contracts that have a maturity at the time of purchase of one year or less, which are reported at cost.
M. Use of Estimates
The preparation of the Basic Financial Statements in conformity with GAAP requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities. In addition, estimates affect the reported amount of expenses. Actual results could differ from these estimates and assumptions.
N. New Pronouncements
In 2023, the City adopted the new accounting standards to conform to the following Governmental Accounting Standards Board Statements:
GASB Statement No. 91, Conduit Debt Obligations - The primary objectives of this Statement are to provide a single method of reporting conduit debt obligations by issuers and eliminate diversity in practice associated with (1) commitments extended by issuers, (2) arrangements associated with conduit debt obligations, and (3) related note disclosures. The requirements of this statement did not apply to the City for the current fiscal year.
242
City of Solvang
Notes to the Basic Financial Statements
For the year ended June 30, 2023
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED N. New Pronouncements, Continued
GASB Statement 9{ Public-Private and Public-Public Partnerships and Availability Payment Arrangements - The primary objective of this Statement is to improve financial reporting by addressing issues related to public-private and public-public partnership arrangements (PPPs). As used in this Statement, a PPP in an arrangement in which a government (the transferor) contracts with an operator (a governmental or nongovernmental entity) to provide public services by conveying control of the right to operate or use a nonfinancial asset, such as infrastructure or other capital asset (the underlying PPP asset), for a period of time in an exchange or exchange-like transaction. The requirements of this statement did not apply to the City for the current fiscal year.
GASB Statement No. 96, Subscription-based Information Technology Arrangements - This Statement provides guidance on the accounting and financial reporting for subscription-based information technology arrangements (SBITAs) for government end users (governments). This Statement (1) defines a SBITA; (2) establishes that a SBITA results in a right-to-use subscription asset - an intangible asset - and a corresponding subscription liability; (3) provides the capitalization criteria for outlays other than subscription payments, including implementation costs of a SBITA; and (4) requires note disclosures regarding a SBIT A. The requirements of this Statement did not apply to the City for the current fiscal year.
2. CASH AND INVESTMENTS
A. Summary of Cash and Investments
Government-Wide
Statement of Net Position
Governmental Business-Type Fiduciary
Activities Activities Funds Total
Cash and investments $ 20,724,945 $ 8,689,256 $ 37,628 $ 29,451,829 Total cash and investments $ 20,724,945 $ 8,689,256 $ 37,628 $ 29,451,829 243
City of Solvang
Notes to the Basic Financial Statements
For the year ended June 30, 2023
2. CASH AND INVESTMENTS, CONTINUED
Deposits and investments at June 30, 2023 consisted of the following:
B. Deposits
City Treasury:
Deposits:
Cash on hand
Deposits with financial institution
Total cash on hand and deposits
Investments:
Local Agency Investment Fund (LAIF)
Total investments
Total cash and investments
$ 550
2,288,465
2,289,015
27,162,814
27,162,814
$ 29,451,829
At June 30, 2023, the carrying amount of the City's cash and cash equivalents were comprised of the general checking account which had a book balance of $2,288,465 and petty cash of $550. The bank balance in the City's general checking was $2,417,195 fully insured and collateralized with securities held by the pledging financial institutions in the City's name as discussed below. The difference between the bank balance and the carrying amount represents outstanding checks and deposits in transit.
The California Government Code requires California banks and savings and loan associations to secure the City's cash deposits by pledging securities as collateral. This Code states that collateral pledged in this manner shall have the effect of perfecting a security interest in such collateral superior to those of a general creditor. Thus, collateral for cash deposits is considered to be held in the City's name. The fair value of pledged securities must equal at least 110% of the City's cash deposits. California law also allows institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of the City's total cash deposits. The City's cash deposit was fully insured up to $250,000 by the Federal Deposit Insurance Corporation. The remaining amount was collateralized with securities held by the pledging financial institutions in the City's name.
The City follows the practice of pooling cash and investments of all funds, except for funds required to be held by fiscal agents under the provisions of bond indentures or trust agreements. Interest income earned on pooled cash and investments is allocated to the various funds based on the period-end cash and investment balances. Interest income from cash and investments with fiscal agents or held in trust is credited directly to the related fund.
244
City of Solvang
Notes to the Basic Financial Statements
For the year ended June 30, 2023
2. CASH AND INVESTMENTS, CONTINUED
C. Investments
The City is authorized by State statutes to invest in the following:
*
*
*
*
*
*
*
*
*
*
U.S. Treasury and U.S. Agency Issues
Certificates of Deposit
California Local Agency Investment Fund (LAIF)
Government Bonds and Notes
Passbook Savings
Bankers Acceptances
Commercial Paper (Corporations)
Medium-Term Corporate Notes
Repurchase Agreements
Mutual Funds
The City is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by Code Section 16429 under the oversight of the Treasurer of the State of California. The City's investments with LAIF at June 30, 2023, include a portion of the pool funds invested in Structured Notes and Asset-Backed Securities. These investments include the following:
Structured Notes - are debt securities (other than asset-backed securities) whose cash flow characteristics (coupon rate, redemption amount, or stated maturity) depend upon one or more indices and/ or have embedded forwards or options.
Asset-Backed Securities - the bulk of which are mortgage-backed securities, entitle their purchasers to receive a share of the cash flows from a pool of assets such as principal and interest repayments from a pool of mortgages (such as Collateralized Mortgage Obligations) or credit card receivables.
As of June 30, 2023, the City had $27,162,814 invested in LAIF, which had invested 2.78% of the pool investment funds in Structured Notes and Asset-Backed Securities as compared to 1.88% in the previous year. The LAIF fair value factor of 0.984828499 was used to calculate the fair value of the investments in LAIF.
D. Risk Disclosures
Interest Rate Risk: Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, an investment with a longer maturity date has a greater sensitivity of its fair value to be subject to changes in market interest rates. In accordance with the City's investment policy, exposure to interest rate risk is mitigated by purchasing a combination of shorter term and longer term investments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary to provide the cash flow and liquidity needed for operations.
245
City of Solvang
Notes to the Basic Financial Statements
For the year ended June 30, 2023
2. CASH AND INVESTMENTS, CONTINUED
D. Risk Disclosures, Continued
As a means of limiting its exposure to fair value losses arising from rising interest rates, the City's investment policy limits the City's investment portfolio to maturities of five years or less.
Inveshnent Maturities (in years)
More than 1 year
Inveshnent Type Total Less than 1 year less than 5 years Investments:
Local Agency Investment Fund $ 27,162,814 $ 27,162,814 $ Total $ 27,162,814 $ 27,162,814 $
Credit Risk - State law limits investments in various securities to certain level of risk ratings issued by nationally recognized statistical rating organizations. It is the City's policy to comply with State law as regards securities ratings. The City's investment in the State Investment Pool is umated.
Custodial Credit Risk - For an investment, custodial credit risk is the risk that, in the event of the failure of a counterparty, the City will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. The City's investment policy specifies that securities are to be held by a third party, other than the counterparty, in the City's name, whenever possible. The investment in the LAIF is not subject to custodial credit risk.
E. Investment Valuation
Investments are measured at fair value on a recurring basis. Recurring fair value measurements, are those that Governmental Accounting Standards Board (GASB) Statements require or permit in the statement of net position at the end of each reporting period. Fair value measurements are categorized based on the valuation inputs used to measure an asset's fair value: Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs, such bond valued by a pricing service that uses matrix pricing, pay-fixed receive-variable interest rate swap based on the Long Interbank Offered Rate (LIBOR) swap rate, three-year option on exchange-traded shares, or valuation multiple; Level 3 inputs are significant unobservable inputs. The City's investments were not subject to levelling disclosure.
246
City of Solvang
Notes to the Basic Financial Statements
For the year ended June 30, 2023
3. INTERFUND TRANSACTIONS
The composition of interfund transfers for the year ended June 30, 2023 is as follows:
Transfers in
City Water Transit
General Projects Enterprise Enterprise
Transfers out: Fund Fund Fund Fund
General Fund $ - $ 1,439,859 $
- $-
Non-Major Governmental Funds 388,171 452,460 3,000
Internal Service Fund 200,000 90,000
Totals $ 388,171 $ 2,092,319 $ 90,000 $ 3,000
Total
Transfers
$ 1,439,859
843,631
290,000
$ 2,573,490
Transfers of $2,092,319 to City Capital Projects Fund were to fund various street and other capital project expenditures. Remaining transfers were to fund on-going street, sewer, and transportation activities.
The composition of due to and due from other funds as of June 30, 2023 is as follows:
Due to General Fund
Non-Major Governmental Funds $ 1,776
Totals
4. LOANS AND NOTES RECEIVABLES
$ 1,776
The notes receivable as of June 30, 2023, comprised of a development note receivable of $17,838 and $1,341 in micro loans to local businesses to help with covering expenses for those businesses. Loans receivable as of June 30, 2023 was $19,179.
5. LEASES RECEIVABLES
In implementing GASB Statement No. 87 - Leases, the City recognized lease receivables and deferred inflows of resources for the leasing of attachment space for cellular communications. In fiscal year ended June 30, 2023, the City recognized $16,341 in revenues for applicable leases.
City Cell Tower - The City entered into an agreement with a telecommunications company in 1993 to lease space on a telecommunications tower. The lease term is 30 years, made up of an initial 10-year term plus four 5-year options. The City considers each optional term to likely be exercised by the lessee. The monthly payments as of July 1, 2021 were $1,739, and increases annually by 3%. The City used an annual incremental borrowing rate of 7.25%, based on financing quotation. The lease receivable as of June 30, 2023 was $183,602, and related deferred inflow of resources as of June 30, 2023 was $166,393. 247
City of Solvang
Notes to the Basic Financial Statements
For the year ended June 30, 2023
5. LEASES RECEIVABLES, CONTINUED
Future minimum rental payments are as follows:
Year Ending
June 30, Principal
2024 $ 9,516
2025 10,928
2026 12,466
2027 14,142
2028 15,965
2029-2033 113,220
2034 7,365
Total $ 183,602
Current $ 9,516
Noncurrent 174,086
Total $ 183,602
6. CAPITAL ASSETS
Interest Total
$ 13,005 $ 22,521
12,269 23,197
11,426 23,892
10,468 24,610
9,383 25,348
25,392 138,612
74 7,440
$ 82,017 $ 265,620
$ 13,005 $ 22,521
69,012 243,099
$ 82,017 $ 265,620
Capital asset activity relating to governmental activities for the year ended June 30, 2023 was as follows:
Beginning Decreases/ Ending
Governmental activities: Balance Increases Reclassification Balance Capital assets, not being depreciated
Land $ 2,721,866 $ - $
- $ 2,721,866
Construction in progress 56,561 30,029 (43,942) 42,648
Total capital assets, not being depreciated 2,778,427 30,029 (43,942) 2,764,514 Capital assets, being depreciated:
Buildings 3,402,544 605,561 4,008,105
Machinery and equipment 797,455 231,355 (8,208) 1,020,602 Internal service fund - vehicles/ equipment 989,713 989,713 Improvements 6,772,605 118,570 6,891,175
Infrastructure-street sys tern 12,347,405 859,181 43,942 13,250,528 Total capital assets being depreciated 24,309,722 1,814,667 35,734 26,160,123 Less accumulated depreciation for:
Buildings (2,020,043) (77,178) (2,097,221)
Machinery and equipment (728,002) (23,126) 8,208 (742,920) Internal service fund (728,766) (49,222) (777,988)
Improvements (4,032,075) (184,344) (4,216,419)
Infrastructure-street system (5,590,873) (597,213) (6,188,086) Total accumulated depreciation (13,099,759) (931,083) 8,208 (14,022,634) Total capital assets, being depreciated, net 11,209,963 883,584 43,942 12,137,489 Governmental activities capital assets, net $ 13,988,390 $ 913,613 $ $ 14,902,003 248
City of Solvang
Notes to the Basic Financial Statements
For the year ended June 30, 2023
6. CAPITAL ASSETS, CONTINUED
Capital asset activity relating to business-type activities for the year ended June 30, 2023 was as follows:
Beginning Decreases/ Ending
Business-type activities: Balance Increases Reclassification Balance Ca pita! assets, not being depreciated
Land $ 191,208 $ $ $ 191,208
Construction in progress 234,745 242,596 (58,509) 418,832 Total capital assets, not being depreciated 425,953 242,596 (58,509) 610,040 Capital assets, being depreciated:
Buildings and bus stop facilities 8,384,276 500,000 (521,921) 8,362,355 Distribution and collection systems 11,661,781 31,016 521,921 12,214,718 lnfras tructure 9,192,824 783,116 58,509 10,034,449
Vehicles 949,617 949,617
Equipment 2,061,337 93,793 2,155,130
Total capital assets being depreciated 32,249,835 1,407,925 58,509 33,716,269 Less accumulated depreciation for:
Buildings (7,172,377) (149,889) 350,795 (6,971,471)
Distribution and collection systems (8,164,426) (346,494) (350,795) (8,861,715) Infrastructure (2,370,868) (329,521) (2,700,389)
Vehicles (727,346) (39,958) (767,304)
Equipment (1,375,765) (80,967) {1,456,732)
Total accumulated depreciation (19,810,782) (946,829) (20,757,611) Total capital assets, being depreciated, net 12,439,053 461,096 58,509 12,958,658 Business-type activities capital assets, net $ 12,865,006 $ 703,692 $ $ 13,568,698 Depreciation and amortization expense was charged to functions/programs of the City as follows:
Governmental activities:
General government $ 77,359
Public safety 7,168
Culture and recreation 114,169
Infrastructure streets 683,165
Vehicles- internal service fund 49,222
Total depreciation expense-governmental activities $ 931,083 Business-type activities:
Water $ 354,443
Wastewater 494,637
Transit 97,749
Total depreciation expense-business-type activities $ 946,829 249
City of Solvang
Notes to the Basic Financial Statements
For the year ended June 30, 2023
7. LONG-TERM OBLIGATIONS
Long-term liability activity for the 2023 fiscal year was as follows:
Beginning
Balance Additions Reductions
Governmental
Activities:
Compensated absences $ 176,212 $ 81,112 $ (176,212)
Total $ 176,212 $ 81,112 $ (176,212)
Business-type
Activities:
Compensated absences $ 89,536 $ 69,501 $ (89,531)
Total $ 89,536 $ 69,501 $ (89,531)
Due in
Ending Due Within More Than
Balance One Year One Year
$ 81,112 $ 30,000 $ 51,112
$ 81,112 $ 30,000 $ 51,112
$ 69,506 $ 30,000 $ 39,506
$ 69,506 $ 30,000 $ 39,506
The general fund is typically used to liquidate the liability for compensated absences applicable to the City's governmental activities.
8. RISK MANAGEMENT
The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; and natural disasters for which the City carries insurance. The City is a member of the California Joint Powers Insurance Authority (California JPIA). The California JPIA provides general liability insurance to the City with a $50 million per occurrence and $50 million per year aggregate limit. The City also participates in the Insurance Authority's workers compensation insurance program. The risk of loss is transferred to the California JPIA. The City is subject to retrospective premium adjustments under the arrangement.
The uninsured risk retained by the City is $50,000 per incident for workers compensation claims, $20,000 per incident for general liability claims, and $5,000 per property damage claim. The Insurance Authority purchases commercial insurance for claims in excess of its deductible amounts which is $5 million for liability and $500,000 for workers compensation. Insurance transactions are accounted for in the general fund. Liabilities of the City are reported in the statement of net assets for the governmental activities when it is probable that a loss has occurred and the amount of the loss can be reasonably estimated. Liabilities include an amount for claims that have been incurred but not reported (IBNRs). The result of the process to estimate the claims liability is not an exact amount as it depends on many complex factors, such as inflation, changes in legal doctrines, and damage awards. Accordingly, claims are reevaluated periodically to consider the effects of inflation, recent claim settlement trends (including frequency and amount of payouts), and other economic and social factors. The estimate of the claims liability also includes amounts for incremental claim adjustment expenses related to specific claims and other claim adjustment expenses regardless of whether allocated to specific claims. Estimated recoveries, for example from salvage or subrogation, are another component of the claims liability estimate. Settlements have not exceeded coverage for each of the past three fiscal years. There were no changes in the balances of claims liabilities during the past two years.
250
City of Solvang
Notes to the Basic Financial Statements
For the year ended June 30, 2023
9. CONTINGENCIES AND COMMITMENTS
Litigation. The City is involved in litigation incurred in the normal course of conducting City business.
Although the outcome of these lawsuits is not presently determinable, in the opinion of the City's counsel the resolution of these matters will not have a material adverse effect on the financial condition of the City.
Grants and allocations. Amounts received or receivable from grant agencies are subject to audit and adjustment by grantor agencies, principally the federal and state government. Any disallowed claims, including amounts already collected, may constitute a liability of the applicable funds. The amount, if any, of expenditures that may be disallowed by the grantor cannot be determined at this time, although the City expects such amounts, if any, to be immaterial.
Encumbrances. As of June 30, 2023, the City had the following outstanding encumbrances:
General
General Capital Wastewater Transit Grand
Expense Fund Project Water Fund Fund Fund Total
Urban Planning Concepts $ 17,413 $ - $
- $- $- $ 17,413
Visitors Center 29,837 29,837
Stiletto Events 27,400 27,400
Hanly Emergency Construction 347,768 347,768
MNS Engineers 11,455 11,455
Lot 4 & 5 EV Charging Station Design 26,865 26,865
River Wells Project 90,366 90,366
SYVT Professional Services 20,832 20,832
Fredensberg Canyon Waterline Rep 14,634 14,634
New Valve and Hydrant Replacement 28,650 28,650
Sewer Line Replacement 47,800 47,800
WWTP Water Quality Project 58,212 58,212
WWTP Construction Engineering 53,000 53,000
WWTP Upgrades Grant Writing 67,886 67,886
Meridian Grant Writing CEQA/NEPA 18,827 18,827
Grand Total $ 433,873 $ 26,865 $ 133,650 $ 245,725 $ 20,832 $ 860,945
10. OPERATING AGREEMENTS
Water Supply Agreement. The City has an agreement with the Santa Ynez River Water Conservation District, Improvement District One, wherein the District and The Central Coast Water Authority constructed and operate a joint water treatment facility and water conveyance system. The Authority financed the plant and system by selling revenue bonds, and in 1997, issued $198 million in refunding revenue bonds. The agreement is a take-or-pay obligation, and the City is obligated to pay amounts specified in the agreement whether or not water is treated or delivered. The amounts paid by the City are pledged by the Authority for repayment of the Authority's debt obligations. The City records these payments as operating expenses in its water enterprise fund.
251
City of Solvang
Notes to the Basic Financial Statements
For the year ended June 30, 2023
11. PENSION PLANS
A. Plan Description
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 (benefit tiers) within a safety risk pool (police and fire) and a miscellaneous risk pool (all other.) Plan assets may be used to pay benefits for any employer rate plan of the safety and miscellaneous risk 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 two miscellaneous rate plans and three safety rate plans. Benefit provisions under the Plan are established by State statute and City resolution. CalPERS issues publicly available reports that include a full description of the pension plan regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website.
CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full time employment. Members with five years of total service are eligible to retire at age 55 with statutorily reduced benefits. All members are eligible for nonduty disability benefits after 10 years of service. The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost of living adjustments for each plan are applied as specified by the Public Employee's Retirement Law. 252
City of Solvang
Notes to the Basic Financial Statements
For the year ended June 30, 2023
11. PENSION PLANS, CONTINUED
B. Benefits Provided
The rate plan provisions and benefits in effect at June 30, 2023 are summarized as follows:
Miscellaneous PEPRA Safety Miscellaneous
Hire date Prior to January On or after Prior to January 1,20 13 January 1, 2013 12013
Benefit formula 2.5%@ 55 2.0% @62 2%@50
Benefit vesting schedule 5 years service 5 years service 5 years service Benefit payments monthly for life monthly for life monthly for life Retirement age 50 -55 50 -55 50 -55
Monthly benefits, as a % of eligible compensation 2.0% to2.5% 2.0% 2.0% Required employee contribution rates 8.000% 7.250% 0.000% Required employer contribution rates 13.020% 7. 760% 0.000% Required unfunded liability payment $ 405 ,136 $ 1,764 $ 11,700 Contributions - Section 20814(c) of the California Public Employees' Retirement Law requires that the employer contribution rates for all public employers be determined on an actuarial basis, annually and is effective on July 1 following notice of a change in the rate. Funding contributions for the Plan are determined annually on an actuarial basis as of June 30 by CalPERS. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The City is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. The General Fund has typically been used to liquidate pension liabilities for governmental funds.
The City's contributions to the Plan for the measurement period ended June 30, 2022 were $471,400. The City's contributions to the Plan for the fiscal year ended June 30, 2023 recorded as deferred outflows of resources were $544,960.
As of June 30, 2023, the City reported a net pension liability for its proportionate share of the net pension liability of the Plan of $5,603,171.
253
City of Solvang
Notes to the Basic Financial Statements
For the year ended June 30, 2023
11. PENSION PLANS, CONTINUED
C. Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related to Pensions
The City's net pension liability for the Plan is measured as the proportionate share of the total net pension liability of the Plan. The net pension liability of the Plan is measured as of June 30, 2022, and the total pension liability for the Plan used to calculate the net pension liability was determined by actuarial valuations as of June 30, 2021 rolled forward to June 30, 2022 using standard update procedures. The City's proportionate share of the net pension liability was based on the City's plan liability and assetrelated information where available, and proportional allocations of individual plan amounts as of the valuation date where not available.
The City's proportionate share of the net pension liability for each Plan as of measurement dates June 30, 2021 and 2022 were as follows:
Proportion - June 30, 2021
Proportion - June 30, 2022
Change - Increase (Decrease)
0.04800%
0.04851%
0.00051 %
For the year ended June 30, 2023, the City recognized pension income of $22,822. At June 30, 2023, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:
Deferred Deferred
Outflows Inflows of
of Resources Resources
Differences between expected and actual
experience $ 114,415 $ 75,132
Changes in assumptions 574,017
Net difference between projected and actual
earnings on pension plan investments 1,024,109
Changes in proportions 79,793
Differences between expected and actual contributions 463,032 Pension contributions subsequent to the
measurement date 544,960
Totals $ 2,337,294 $ 538,164
$544,960 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ending June 30, 2024.
254
City of Solvang
Notes to the Basic Financial Statements
For the year ended June 30, 2023
11. PENSION PLANS, CONTINUED
C. Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related to Pensions, Continued
Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:
Fiscal Year
Ended June 30
2024
2025
2026
2027
$ 243,476
238,852
145,483
626,359
Actuarial Assumptions - The total pension liability in the June 30, 2021 actuarial valuations were determined using the following actuarial assumptions:
Valuation Date
Measurement Date
Actuarial Cost Method
Actuarial Assumptions:
Discount Rate
Inflation
Projected Salary Increase
Investment Rate of Return (l)
Mortality
June 30, 2021
June 30, 2022
Entry-Age Normal Cost Method
6.90%
2.30%
Varies by entry age and service
6.90%
Derived by CalPERS membership
data for all funds
(1) Net of pension plan investment expenses.
The mortality table used was developed based on CalPERS-specific data. The table includes 15 years of mortality improvements using Society of Actuaries Scale 90% of scale MP 2016. Further details of the December 2017 Experience Study can be found on the CalPERS website www.calpers.ca.gov.
Discount Rate - The discount rate used to measure the total pension liability was 6.90% for the Plan.
To determine whether the municipal bond rate should be used in the calculation of a discount rate for the Plan, CalPERS stress tested plans that would most likely result in a discount rate that would be different from the actuarially assumed discount rate. Based on the testing, none of the tested plans run out of assets. Therefore, the current 6.90 percent discount rate is adequate and the use of the municipal bond rate calculation is not necessary. The long term expected discount rate of 6.90 percent will be applied to all plans in the Public Employees Retirement Fund (PERF). The stress test results are presented in a detailed report that can be obtained from the CalPERS website. 255
City of Solvang
Notes to the Basic Financial Statements
For the year ended June 30, 2023
11. PENSION PLANS, CONTINUED
C. Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related to Pensions, Continued
The long-term expected rate of return on pension plan investments was determined using a buildingblock method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class.
In determining the long-term expected rate of return, CalPERS took into account long-term market return expectations as well as the expected pension fund cash flows. Projected returns for all asset classes are estimated and, combined with risk estimates, are used to project compound (geometric) returns over the long term. The discount rate used to discount liabilities was informed by the long-term projected portfolio return.
The expected real rates of return by asset class are as follows:
New
Strategic Real
Asset Class Allocation Return(a)(b)
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%
Total 100.00%
(a) An expected inflation of 2.3% used for this period. (b) Figures are based on the 2021-22 Asset Liability Management study.
Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the Discount Rate The following presents the City's proportionate share of the net pension liability for the Plan, calculated using the discount rate for the 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-percentage point lower or 1- percentage point higher than the current rate:
Net Pension Liability $
1%
Decrease
Current
Discount Rate
5,274,593 $ 2,596,064 $
1%
Increase
382,209
256
City of Solvang
Notes to the Basic Financial Statements
For the year ended June 30, 2023
11. PENSION PLANS, CONTINUED
C. Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related to Pensions, Continued
Pension Plan Fiduciary Net Position - Detailed information about each pension plan's fiduciary net position is available in the separately issued CalPERS financial reports.
Payable to the Pension Plan
At June 30, 2023, the City reported no payable for outstanding amount of contributions to the pension plan required for the year ended June 30, 2023.
Change of Assumptions
On November 17, 2021, the board adopted a new strategic asset allocation. The new asset allocation along with the new capital market assumptions, economic assumptions and administrative expense assumption support a discount rate of 6.90% (net of investment expense but without a reduction for administrative expense) for financial reporting purposes. This includes a reduction in the price inflation assumption from 2.50% to 2.30% as recommended in the November 2021 CalPERS Experience Study and Review of Actuarial Assumptions. This study also recommended modifications to retirement rates, termination rates, mortality rates and rates of salary increases that were adopted by the board.
12. RESTRICTED NET POSITION AND FUND BALANCES
The $3,498,573 restricted amount in the governmental activities statement of net position represents amounts to be used only for specific purposes which restrictions are imposed by laws, formal agreements or other governments.
13. OTHER POST- EMPLOYMENT BENEFITS
A. Plan Description.
The City's defined benefit OPEB Plan provides OPEB for all eligible full-time general and public safety employees of the City. The City entered into an agreement with CalPERS to participate in the CERBT, an agent multiple-employer other postemployment benefits plan, to fund the City's OPEB. CERBT is administered by CalPERS, which is managed by an appointed board not under the control of the City Council. CEBT issues a publicly available financial report that can be found on the CalPERS website at www.calpers.ca.gov.
257
City of Solvang
Notes to the Basic Financial Statements
For the year ended June 30, 2023
13. OTHER POST- EMPLOYMENT BENEFITS, CONTINUED
A. Plan Description, Continued
Benefits Provided.
The City's OPEB plan provides healthcare benefits to eligible retirees and their dependents. Benefits are provided through third party insurers, and the full cost of the benefits is provided by the Plan. The City's OPEB Plan provides for automatic or ad hoc post-employment benefit changes.
Employees Covered by the Benefit Terms.
At June 30, 2023, the following employees were covered by the benefit terms:
Inactive employees or beneficiaries current receiving benefits Inactive employees entitled to but not yet receiving benefit payments Active employees
The City's OPEB Plan is closed to new entrants.
B. Contributions
26 28
54 The City's plan is affiliated with the State of California PERS in so far as the City's health insurance premium payments are paid to the PERS. The PERS through an aggregation of single employer plans pools administrative functions in regard to purchases of commercial health insurance policies and coverages. City regulations grant authority to the City Council to establish and amend contribution requirements. Employees are not required to contribute to the plan. The amount contributed for the measurement period ended June 30, 2022 was $220,385 which amount was based on the City's decision to prefund its obligation. The General Fund has typically been used to liquidate OPEB liabilities for governmental funds. The City's contribution for fiscal year 2023 was $232,892.
C. Net OPEB Liability
The City's net OPEB liability was measured as of June 30, 2022 and the total OPEB liability used to calculate the net OPEB liability was determined by an actuarial valuation as of June 30, 2022.
D. Actuarial Assumptions
The total net OPEB liability in the June 30, 2022 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement unless otherwise specified:
Inflation
Salary increases
Investment rate of return
Healthcare cost trend rates
2.50 percent
2.75 percent, average, including inflation
6.25 percent, net of OPEB plan investment expense
4.0 percent per year
Mortality rates were based on the 2017 CalPERS Mortality for Miscellaneous and Schools Employees. 258
City of Solvang
Notes to the Basic Financial Statements
For the year ended June 30, 2023
13. OTHER POST- EMPLOYMENT BENEFITS, CONTINUED
D. Actuarial Assumptions, Continued
The long-term expected rate of return on OPEB plan investments was determined using a buildingblock method in which best-estimate ranges of expected future real rates of return (expected returns, net of OPEB plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return weighing the expected future real rates of return by target asset allocation asset allocation percentage and by adding expected inflation. The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized below:
Percentage of Assumed Gross
Asset Class Portfolio Return
All Equities 40% 7.5450%
All Fixed Income 43% 4.2500%
Real Estate Investment Trusts 8% 7.2500%
All Commodities 4% 7.5450%
Treasury Inflation Protected Securities (TIPS) 5% 3.0000% E. Discount Rate
The discount rate used to measure the total OPEB liability was 6.25 percent. The projection of cash flows used to determine the discount rate assumed that City contributions will be made at rates equal to the actuarially determined contribution rates. Based on those assumptions, the OPEB plan's fiduciary net position was projected to be available to make all projected OPEB payments for current and active employees. Therefore, the long-term expected rate of return on OPEB plan investments was applied to all periods of projected benefit payments to determine the total OPEB liability. 259
City of Solvang
Notes to the Basic Financial Statements
For the year ended June 30, 2023
13. OTHER POST- EMPLOYMENT BENEFITS, CONTINUED
F. Net OPEB Liability
Increase (Decrease)
Total Plan Net
OPEB Fiduciary Net OPEB
Liability Position Liability
(a) (a) (a) - (b)
Balances at 6/30/2021 (Measurement Date) $ 2,441,071 $ 1,045,642 $ 1,395,429 Changes for the year:
Service cost 27,601 27,601
Interest 148,855 148,855
Differences between expected and actual experience (173,598) (173,598) Contributions - employer 220,385 (220,385)
Net investment income (138,627) 138,627
Benefit payments (150,797) (150,797)
Administrative expenses (271) 271
Net changes (147,939) (69,310) (78,629)
Balances at 6/30/2022 (Measurement Date) $ 2,293,132 $ 976,332 $ 1,316,800 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 a discount rate that is 1-percentage-point lower (5.25 percent) or 1- percentage point higher (7.25 percent) than the current discount rate.
Net OPEB Liability (Asset) $
1 % Decrease
5.25%
Discount Rate
6.25%
1,587,556 $ 1,316,800 $
1 % Increase
7.25%
1,092,558
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 a healthcare cost trend rate that is 1-percentage-point lower (3 percent) or 1- percentage point higher (5 percent) than the current healthcare cost trend rate.
Healthcare
1 % decrease Cost Trend 1 % increase
to Rate to
3.00% 4.00% 5.00%
Net OPEB Liability (Asset) $ 1,074,709 $ 1,316,800 $ 1,611,032 260
City of Solvang
Notes to the Basic Financial Statements
For the year ended June 30, 2023
13. OTHER POST- EMPLOYMENT BENEFITS, CONTINUED
G. OPEB Plan Fiduciary Net Position
Detailed information about the OPEB plan's fiduciary net position is available in the separately issued financial report.
H. OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB
For the year ended June 30, 2023, the City recognized OPEB expense of $61,743. At June 30, 2023, the City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources:
Deferred Deferred
Outflows Inflows of
of Resources Resources
OPEB contributions subsequent to the
measurement date $ 232,892 $
Differences between expected and actual experience 2,480 406,018 Changes in assumptions 51,067 31,577
Net difference between projected and actual
earnings on OPEB plan investments 103,192
Totals $ 389,631 $ 437,595
$232,892 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ending June 30, 2024. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized as pension expense as follows:
Fiscal Year
Ended June 30
2024
2025
2026
2027
2028
Thereafter
$ (47,449)
(45,887)
(47,568)
(26,283)
(67,595)
(46,074)
261
REQUIRED SUPPLEMENT ARY
INFORMATION
262
City of Solvang
Required Supplementary Information
For the year ended June 30, 2023
1. DEFINED BENEFIT PENSION PLAN
A. Schedule of the City's Proportionate Share of the Net Pension Liability- Last 10 Years* Fiscal year: 2023 2022 2021
Measurement date: 6/30/2022 6/30/2021 6/30/2020
Proportion of the net pension liability 0.04851 % 0.04800% 0.04316% Proportionate share of the net pension liability $ 5,603,171 $ 2,596,064 $ 4,695,870 Covered payroll $ 1,840,839 $ 1,617,922 $ 2,090,447
Proportionate share of the net pension liability as a
percentage of covered payroll 304.38% 160.46% 224.63%
Plan's share of fiduciary net position as a percentage
of total pension liability 76.68% 88.29% 75.10%
*Fiscal year 2015 was the 1st year of implementation, therefore only nine years are shown. 2020
6/30/2019
0.04206%
$ 4,310,393
$ 2,588,376
166.53%
75.26%
The CalPERS discount rate was increased from 7.5% to 7.65% in fiscal year 2016, and then decreased from 7.65% to 7.15% in fiscal year 2018. The discount rate was decreased to 6.9% in 2023.
The CalPERS mortality assumptions were adjusted in fiscal year 2019. 263
2019 2018 2017 2016 2015
6/30/2018 6/30/2017 6/30/2016 6/30/2015 6/30/2014
0.04086% 0.04040% 0.03943% 0.03911% 0.03911 %
$ 3,937,533 $ 4,006,588 $ 3,411,989 $ 2,684,713 $ 2,684,713 $ 2,271,637 $ 2,247,735 $ 2,212,540 $ 2,413,263 $ 2,413,263 173.33% 178.25% 154.21 % 111.25% 111.25%
75.26% 73.31 % 74.06% 78.40% 78.40%
264
City of Solvang
Required Supplementary Information
For the year ended June 30, 2023
1. DEFINED BENEFIT PENSION PLAN, CONTINUED
B. Schedule of Employer Pension Contributions -Last 10 Years* Fiscal year 2022
Contractually required contribution (actuarially
determined) $ 544,960 $
Contribution in relation to the actuarially
determined contributions (544,960)
Contribution deficiency (excess) $ $
Covered payroll $ 2,369,911 $
Contributions as a percentage of covered payroll 22.99% Note to Schedule
2022 2021
471,400 $ 400,915
(471,400) (400,915)
$
1,840,839 $ 1,617,922
25.61 % 24.78%
*Fiscal year 2015 was the 1st year of implementation, therefore only nine years are shown.
Methods and assumptions used to determine contribution rates:
Valuation date: 6/30/2020 6/30/2019
Actuarial cost method: Entry Age Entry Age
Amortization method: (1) (1)
Assets valuation method: Market Value Market Value
Inflation: 2.63% 2.63%
Salary increases: (2) (2)
Investment rate of return: 7.00% 7.00%
Retirement age: (3) (3)
Mortality: (4) (4)
(l) Level percentage of payroll, closed
<
2 ) Depending on age, service, and type of employment
(
3 ) 50 for all plans, with the exception of 52 for Miscellaneous PEPRA 2%@62 (
4 ) Mortality assumptions are based on mortality
6/30/2018
Entry Age
(1)
Market Value
2.63%
(2)
7.00%
(3)
(4)
2020
$ 369,421
(369,421)
$
$ 2,090,447
17.67%
6/30/2017
Entry Age
(1)
Market Value
2.63%
(2)
7.25%
(3)
(4)
265
2019 2018 2017 2016 2015
$ 339,043 $ 279,932 $ 267,856 $ 275,424 $ 390,955
(339,043) (279,932) (267,856) (275,424) (390,955)
$ $ $ $ $
$ 2,588,376 $ 2,271,637 $ 2,247,735 $ 2,212,540 $ 2,413,263
13.10% 12.32% 11.92% 12.45% 16.20%
6/30/2016 6/30/2015 6/30/2014 6/30/2013 6/30/2012
Entry Age Entry Age Entry Age Entry Age Entry Age
(1) (1) (1) (1) (1)
Market Value Market Value Market Value Market Value 15 Year Smoothed
Market
2.75% 2.75% 2.75% 2.75% 2.75%
(2) (2) (2) (2) (2)
7.375% 7.50% 7.50% 7.50% 7.50%
(3) (3) (3) (3) (3)
(4) (4) (4) (4) (4)
266
City of Solvang
Required Supplementary Information
For the year ended June 30, 2023
2. OTHER POSTEMPLOYMENT BENEFITS
A. Schedule of Changes in the Net OPEB Liability and Related Ratios - Last 10 Years* Fiscal Year 2023 2022
Measurement Period 2022 2021
Total OPEB Liability
Service Cost $ 27,601 $ 25,300
Interest on the total OPEB liability 148,855 151,678
Differences between expected and actual experience (173,598) Changes of assumptions 67,026
Benefit payments (150,797) (144,130)
Net change in total OPEB liability (147,939) 99,874
Total OPEB liability- beginning 2,441,071 2,341,197
Total OPEB liability - ending (a) $ 2,293,132 $ 2,441,071 Plan Fiduciary Net Position
Contributions - employer $ 220,385 $ 214,130
Net investment income (138,627) 161,140
Benefit payments (150,797) (144,130)
Administrative expense (271) (299)
Net change in plan fiduciary net position (69,310) 230,841 Plan fiduciary net position - beginning 1,045,642 814,801 Plan fiduciary net position - ending (b) $ 976,332 $ 1,045,642 Net OPEB liability/(asset) - ending (a) - (b) $ 1,316,800 $ 1,395,429 Plan fiduciary net position as a
percentage of the total OPEB liability 42.58% 42.84%
Covered-employee payroll $ 1,885,073 $ 1,773,026
Net OPEB liability as a percentage of
covered-employee payroll 69.85% 78.70%
Notes to Schedule
* - Fiscal year 2018 was the 1st year of implementation.
Change of assumptions: Mortality assumptions were updated in fiscal year 2021.
Actuarially determined contributions are not calculated for the plan. 2021
2020
$ 17,469
174,097
(397,078)
(49,124)
(134,647)
(389,283)
2,730,480
$ 2,341,197
$ 204,647
39,698
(134,647)
(633)
109,065
705,736
$ 814,801
$ 1,526,396
34.80%
$ 2,412,314
63.28%
267
2020
2019
$ 17,001 $
169,714
(117,453)
69,262
2,661,218
$ 2,730,480 $
$ 187,453 $
48,299
(117,453)
(545)
117,754
587,982
$ 705,736 $
$ 2,024,744 $
25.85%
$ 2,639,268 $
76.72%
2019
2018
16,546 $
164,529
(86,041)
95,034
2,566,184
2,661,218 $
159,080 $
30,282
(86,041)
(446)
102,875
485,107
587,982 $
2,073,236 $
22.09%
2,275,881 $
91.10%
2018
2017
14,390
275,096
(121,194)
168,292
2,397,892
2,566,184
174,832
27,989
(121,194)
81,627
403,480
485,107
2,081,077
18.90%
2,539,234
81.96%
268
City of Solvang
Required Supplementary Information
For the year ended June 30, 2023
3. BUDGETS AND BUDGETARY ACCOUNTING
A. Budgeting Procedures
Annual budgets are adopted on a basis consistent with generally accepted accounting principles for all governmental funds, except repayments of internal balances in the general fund are budgeted as an expenditure for budgetary purposes. Appropriations lapse at fiscal yearend. The appropriated budget is prepared by fund, function and department. The City Manager may make transfers of appropriations within a department. Transfers between departments and other changes require City Council approval.
The legal level of control is the department and fund level. The Council made supplemental appropriations during the fiscal year. Encumbrance accounting is not employed in governmental funds. 269
City of Solvang
Required Supplementary Information
For the year ended June 30, 2023
3. BUDGETS AND BUDGETARY ACCOUNTING, CONTINUED
B. Budxetary Comparison Schedule - General Fund
Budget Amounts
Original Final
Fund Balance, July 1 $ 14,551,249 $ 14,551,249
Resources (inflows):
Property taxes 1,474,254 1,474,254
Sales taxes 1,954,600 1,954,600
Transient occupancy taxes 4,667,010 5,192,010
Other taxes 255,000 255,000
Licenses and permits 140,000 140,000
Fines and forfeits 4,000 4,000
Intergovernmental 911,355 911,355
Interest 40,000 40,000
Charges for services 940,443 940,443
Miscellaneous 18,000 18,000
Transfers in 391,172 391,172
Proceeds from sale of assets 4,000 4,000
Amounts available for charges to appropriations 25,351,083 25,876,083 Charges to appropriations:
General Government:
Nondepartmental:
City council 37,200 37,200
Other 104,741 138,541
OPEB 169,520 169,520
Community support 669,243 706,348
Administration:
Legal 120,000 120,000
General administration 1,610,846 1,879,810
Transfers out 3,234,297 3,234,297
Public Safety:
Sheriff contract 2,468,676 2,468,676
Animal control 47,820 47,820
Mental health & 211 program 3,000 3,000
Culture and Recreation:
Tourism 787,572 803,675
Parks and recreation 160,173 180,591
Library 192,250 192,250
Community Development:
City planning, building, development 664,057 989,690
Public works:
Public works, streets, engineering 2,232,714 3,383,338
Total charges to appropriations 12,502,109 14,354,756
Fund Balance, June 30 $ 12,848,974 $ 11,521,327
Variance with
Final Budget
Actual Positive
Amounts (Negative)
$ 14,551,249 $
1,754,910 280,656
2,517,643 563,043
6,311,438 1,119,428
345,486 90,486
278,418 138,418
50 (3,950)
1,069,199 157,844
276,615 236,615
1,028,743 88,300
280,700 262,700
388,171 (3,001)
(4,000)
28,802,622 2,926,539
37,900 (700)
99,193 39,348
188,358 (18,838)
578,423 127,925
273,811 (153,811)
1,685,818 193,992
1,439,859 1,794,438
2,316,108 152,568
47,820
2,568 432
613,314 190,361
349,317 (168,726)
184,855 7,395
829,798 159,892
2,509,616 873,722
11,156,758 3,197,998
$ 17,645,864 $ 6,124,537
270
City of Solvang
Required Supplementary Information
For the year ended June 30, 2023
3. BUDGETS AND BUDGETARY ACCOUNTING, CONTINUED
C. Budgetary Comparison Schedule - Impact Fee Special Revenue Fund Budget Amounts
Ori�nal Final
REVENUES:
Interest $ 18,424 $ 18,424
Charges for services 4,888 4,888
Total revenues 23,312 23,312
EXPENDITURES:
Capital outlay 10,000 10,000
Total expenditures 10,000 10,000
Net change in fund balances $ 13,312 $ 13,312
FUND BALANCES:
Beginning of the year
End of year
Variance with
Final Budget
Actual Positive
Amounts (Negative)
$ 28,731 $ 10,307
5,190 302
33,921 10,609
10,000
10,000
33,921 $ 20,609
1,531,507
$ 1,565,428
271
SUPPLEMENT ARY INFORMATION
272
This page intentionally left blank
273
BUDGETED MAJOR GOVERNMENTAL FUNDS OTHER THAN
GENERAL FUND AND SPECIAL REVENUE FUNDS
City Capital Projects Fund accounts for monies committed and restricted for City capital projects. 274
City of Solvang
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual City Projects Capital Projects Fund
For the year ended June 30, 2023
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES:
Interest $ 1,100 $ 1,100 $ $ (1,100)
Total revenues 1,100 1,100 (1,100)
EXPENDITURES:
Capital outlay 3,878,000 5,623,068 2,121,753 3,501,315
Total expenditures 3,878,000 5,623,068 2,121,753 3,501,315
REVENUES OVER
(UNDER) EXPENDITURES (3,876,900) (5,621,968) (2,121,753) 3,500,215 OTHER FINANCING SOURCES (USES):
Transfers in 3,878,000 3,878,000 2,092,319 (1,785,681)
Total other financing sources (uses) 3,878,000 3,878,000 2,092,319 (1,785,681) Net change in fund balances $ 1,100 $ (1,743,968) (29,434) $ 1,714,534 FUND BALANCES:
Beginning of the year 11,101
End of year $ (18,333)
275
NON-MAJOR GOVERNMENTAL FUNDS
SPECIAL REVENUE FUNDS
Traffic Safety Fund accounts for fines, forfeitures, and other monies restricted for traffic safety.
Gas Tax Fund accounts for funds from the State of California under the Street and Highway Code Sections 2103, 2105, 2106, 2107 and 2107.5. The use of funds is restricted to street related projects, which can include related public facilities for non-motorized traffic, e.g. bike and pedestrian paths.
Local Transportation Fund accounts for monies restricted by the State of California Transportation Development Act.
Measure A Fund accounts for Measure A Funds (Santa Barbara County) restricted for road repair, traffic relief, and transportation safety projects and programs.
Skytt Mesa Landscape and Lighting Fund accounts for special assessments restricted for the Skytt Mesa Landscape and Lighting District.
276
City of Solvang
Combining Balance Sheet
Non-Major Governmental Funds
June 30, 2023
Special Revenue Funds
Skytt Mesa
Traffic Local Landscape
Safety Gas Tax Transportation Measure A and Lighting Totals ASSETS
Cash and investments $ 2,775 $ $ 422,240 $ 890,938 $ 430,215 $ 1,746,168 Receivables:
Accounts receivable 535 24,615 1,307 122,195 148,652
Interest receivable 57 2,457 3,356 11,016 3,161 20,047
Total assets $ 3,367 $ 27,072 $ 426,903 $ 1,024,149 $ 433,376 $ 1,914,867
LIABILITIES
AND FUND BALANCES
Liabilities:
Accounts payable $ $ $ $ $ 7,804 $ 7,804
Due to other funds 1,776 1,776
Total liabilities 1,776 7,804 9,580
Fund Balances:
Restricted for highways
and streets 3,367 25,296 426,903 1,024,149 425,572 1,905,287 Total fund balances 3,367 25,296 426,903 1,024,149 425,572 1,905,287 Total liabilities
and
fund balances $ 3,367 $ 27,072 $ 426,903 $ 1,024,149 $ 433,376 $ 1,914,867 277
City of Solvang
Combining Statement of Revenues, Expenditures and Changes in Fund Balances Non-Major Governmental Funds
For the year ended June 30, 2023
Special Revenue Funds
Skytt Mesa
Traffic Local Landscape
Safety Gas Tax Transportation Measure A and Lighting Totals REVENUES:
Special assessments $ $ $ $ $ 219,025 $ 219,025
Intergovernmental 268,311 86,705 491,434 846,450
Interest 131 6,354 7,468 26,751 7,712 48,416
Charges for services 4,789 4,789
Total revenues 4,920 274,665 94,173 518,185 226,737 1,118,680 EXPENDITURES:
Current:
Public works
Highways and streets 199,413 199,413
Total expenditures 202,440 202,440
REVENUES OVER
(UNDER)
EXPENDITURES 4,920 274,665 94,173 518,185 24,297 916,240 OTHER FINANCING SOURCES (USES):
Transfers out (5,050) (340,913) (35,000) (462,668) (843,631) Total other financing
sources (uses) (5,050) (340,913) (35,000) (462,668) (843,631) Net change in fund
balances (130) (66,248) 59,173 55,517 24,297 72,609
FUND BALANCES:
Beginning of the year 3,497 91,544 367,730 968,632 401,275 1,832,678 End of year $ 3,367 $ 25,296 $ 426,903 $ 1,024,149 $ 425,572 $ 1,905,287 278
City of Solvang
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Traffic Safety Special Revenue Fund
For the year ended June 30, 2023
REVENUES:
Interest
Charges for services
Total revenues
OTHER FINANCING SOURCES (USES):
Transfers out
Total other financing sources (uses)
Net change in fund balances
FUND BALANCES:
Beginning of the year
End of year
$
$
Budget Amounts
Original
50 $
5,000
5,050
(5,050)
(5,050)
$
Final
50 $
5,000
5,050
(5,050)
(5,050)
$
Actual
Amounts
Variance with
Final Budget
Positive
(Negative)
131 $ 81
4,789 (211)
4,920 (130)
(5,050)
(5,050)
(130) =
$===(=
13 =
0 =
)
3,497
3,367
279
City of Solvang
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Gas Tax Special Revenue Fund
For the year ended June 30, 2023
REVENUES:
Intergovernmental
Interest
Total revenues
OTHER FINANCING SOURCES (USES):
Transfers out
Total other financing sources (uses)
Net change in fund balances
FUND BALANCES:
Beginning of the year
End of year
$
$
Budget Amounts
Original Final
267,037 $ 267,037
1,450 1,450
268,487 268,487
(368,122) (368,122)
(368,122) (368,122)
(99,635)
=
$===
9(::::::
9,
=
63 =
5 =
)
Variance with
Final Budget
Actual Positive
Amounts (Negative)
$ 268,311 $ 1,274
6,354 4,904
274,665 6,178
(340,913) 27,209
(340,913) 27,209
(66,248)
=
$===
3=3'
::::::
38 =
7 =
91,544
$ 25,296
280
City of Solvang
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Local Transportation Special Revenue Fund
For the year ended June 30, 2023
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES:
Intergovernmental $ 84,203 $ 84,203 $ 86,705 $ 2,502
Interest 522 522 7,468 6,946
Total revenues 84,725 84,725 94,173 9,448
OTHER FINANCING SOURCES (USES):
Transfers out (35,000) (35,000) (35,000)
Total other financing sources (uses) (35,000) (35,000) (35,000) Net change in fund balances $ 49,725 $ 49,725 59,173 $ 9,448 FUND BALANCES:
Beginning of the year 367,730
End of year $ 426,903
281
City of Solvang
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Measure A Special Revenue Fund
For the year ended June 30, 2023
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES:
Intergovernmental $ 466,753 $ 466,753 $ 491,434 $ 24,681 Interest 593 593 26,751 26,158
Total revenues 467,346 467,346 518,185 50,839
OTHER FINANCING SOURCES (USES):
Transfers out (501,000) (501,000) (462,668) 38,332
Total other financing sources (uses) (501,000) (501,000) (462,668) 38,332 Net change in fund balances $ (33,654) $ (33,654) 55,517 $ 89,171 FUND BALANCES:
Beginning of the year 968,632
End of year $ 1,024,149
282
City of Solvang
Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Skytt Mesa Landscape and Lighting Special Revenue Fund
For the year ended June 30, 2023
REVENUES:
Special assessments
Interest
Total revenues
EXPENDITURES:
Current:
Public works
Highways and streets
Capital outlay
Total expenditures
Net change in fund balances
FUND BALANCES:
Beginning of the year
End of year
$
$
Budget Amounts
Original
219,024
1,500
220,524
208,650
13,000
221,650
$
Final
219,024
1,500
220,524
227,048
13,000
240,048
(1,126)
=
$===
1(
=
9,
=
52 =
4 =
)
$
$
Actual
Amounts
219,025
7,712
226,737
199,413
3,027
202,440
Variance with
$
Final Budget
Positive
(Negative)
1 6,212
6,213
27,635
9,973
37,608
24,297 ======
$ 43,821
401,275
425,572
283
STATISTICAL SECTION
This part of the Government's annual comprehensive financial report presents detail information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the government's overall financial health.
Contents
Financial Trends
These schedules contain trend information to help the reader understand how the government's financial performance and wellbeing have changed over time.
Revenue Capacity
These schedules contain information to help the reader assess the government's most significant local revenue sources: taxes and water revenues.
Debt Capacity
These schedules present information to help the reader assess the affordability of the government's current level of outstanding debt and the government's ability to issue additional debt in the future.
Demographic and Economic Information
These schedules help the reader understand the environment within which the government's financial activities take place.
Operating Information
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.
284
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285
I\.)
CX)
0)
Governmental activities:
Net investment in capital assets
Restricted
Unrestricted
Total governmental activities net position
Business-type activities:
Net investment in capital assets
Restricted
Unrestricted
Total business-type activities net position
Primary government (City wide totals)
Net investment in capital assets
Restricted
Unrestricted
Total primary government net position
2014 2015
$ 12,057,865 $ 11,748,077
$ 3,155,589 $ 3,011,325
$ 5,935,965 $ 7,488,153
$ 21,149,419 $ 22,247,555
$ 9,512,247 $ 10,409,946
$ $
$ 7,097,759 $ 6,794,971
$ 16,610,006 $ 17,204,917
$ 21,570,112 $ 22,158,023
3,155,589 3,011,325
13,033,724 14,283,124
$ 37,759,425 $ 39,452,472
2016
$ 11,584,893
$ 3,121,123
$ 8,798,516
$ 23,504,532
$ 10,943,614
$
$ 10,725,516
$ 21,669,130
$ 22,528,507
3,121,123
19,524,032
$ 45,173,662
Schedule 1
City of Solvang
Net Position by Component
Last Ten Fiscal Years
(accrual basis of accounting)
2017 2018
$ 12,128,629 $ 12,360,410
$ 3,597,517 $ 3,213,182
$ 7,485,859 $ 9,010,003
$ 23,212,005 $ 24,583,595
$ 10,879,295 $ 10,462,415
$ $
$ 11,550,796 $ 12,687,615
$ 22,430,091 $ 23,150,030
$ 23,007,924 $ 22,822,825
3,597,517 3,213,182
19,036,655 21,697,618
$ 45,642,096 $ 47,733,625
2019 2020 2021 2022 2023
$ 12,565,957 $ 12,696,479 $ 12,740,666 $ 13,988,390 $ 14,902,003 $ 3,443,607 $ 3,435,769 $ 3,545,533 $ 3,390,500 $ 3,498,573 $ 9,093,838 $ 7,687,783 $ 8,279,527 $ 11,206,764 $ 14,872,375 $ 25,103,402 $ 23,820,031 $ 24,565,726 $ 28,585,654 $ 33,272,951 $ 12,053,677 $ 11,521,718 $ 11,555,587 $ 12,865,006 $ 13,568,698 $ $ $ $ $
$ 11,679,974 $ 11,469,414 $ 11,645,387 $ 10,263,902 $ 11,003,603 $ 23,733,651 $ 22,991,132 $ 23,200,974 $ 23,128,908 $ 24,572,301 $ 24,619,634 $ 24,218,197 $ 24,296,253 $ 26,853,396 $ 28,470,701 3,443,607 3,435,769 3,545,533 3,390,500 3,498,573
20,773,812 19,157,197 19,924,914 21,470,666 25,875,978
$ 48,837,053 $ 46,811,163 $ 47,766,700 $ 51,714,562 $ 57,845,252 I\.)
CX)
--..J
Expenses:
Governmental activities:
General government
Public safety
Public works
Community development
Culture and recreation
Interest on long-term debt
Total Governmental Activities
Business-type activities:
Water
Wastewater
Transit
Total Business-type Activities
Total Expenses
Program Revenues:
Governmental activities:
Charges for services:
General government
Public safety
Public works
Community development
Culture and recreation
Operating grants and contributions
Capital grants and contributions
Total Governmental Activities
Business-type Activity:
Charges for services:
Water
Wastewater
Transit
Operating grants and contributions
Capital grants and contributions
Total Business-type Activities
Total Program Revenues
2014
$ 1,578,629
1,639,642
1,792,316
455,085
1,701,142
7,166,814
5,067,560
1,800,351
732,221
7,600,132
$ 14,766,946
467,882
26,170
262,060
446,915
150,541
657,186
57,401
2,068,155
4,671,555
1,640,187
67,688
594,073
911,348
7,884,851
$ 9,953,006
2015
$ 1,417,776
1,647,930
1,789,458
876,912
1,713,110
7,445,186
4,765,816
1,799,891
708,781
7,274,488
$ 14,719,674
552,656
20,140
275,691
416,750
135,769
614,802
40,559
2,056,367
4,422,992
1,623,447
65,696
805,635
950,429
7,868,199
$ 9,924,566
$
Schedule 2
City of Solvang
Changes in Net Position
Last Ten Fiscal Years
(accrual basis of accounting)
2016 2017 2018
1,664,564 $ 2,031,468 $ 1,274,194
1,637,483 1,675,872 1,737,083
2,045,387 2,499,428 2,375,931
463,965 434,362 559,661
1,858,427 1,865,952 2,022,884
7,669,826 8,507,082 7,969,753
4,077,790 4,030,207 4,307,206
1,733,416 2,083,850 2,090,605
701,114 848,637 856,112
6,512,320 6,962,694 7,253,923
$ 14,182,146 $ 15,469,776 $ 15,223,676
497,867 499,324 512,784
14,251 19,039 11,506
325,298 430,863 502,886
412,305 287,874 168,769
104,343 119,547 120,414
530,193 773,860 630,949
116,767 921,294 198,314
2,001,024 3,051,801 2,145,622
4,457,268 4,566,227 4,919,648
1,736,952 1,669,291 1,824,725
59,869 78,573 61,631
813,847 888,618 809,650
587,845 214,575 51,708
7,655,781 7,417,284 7,667,362
$ 9,656,805 $ 10,469,085 $ 9,812,984
2019 2020 2021 2022 2023
$ 1,778,600 $ 2,532,206 $ 1,973,026 $ 2,911,369 $ 2,805,808 1,820,369 2,039,940 1,861,310 2,189,633 2,373,664
2,821,441 2,430,740 2,393,971 2,580,297 3,179,379
822,307 686,326 704,481 805,316 808,250
2,182,521 2,816,624 1,651,868 1,221,471 1,093,712
9,425,238 10,505,836 8,584,656 9,708,086 10,260,813
4,861,159 4,922,788 5,280,019 5,216,176 4,303,277
2,343,221 2,481,979 2,222,770 2,248,410 2,402,724
996,657 982,433 1,029,086 1,099,939 1,134,410
8,201,037 8,387,200 8,531,875 8,564,525 7,840,411
$ 17,626,275 $ 18,893,036 $ 17,116,531 $ 18,272,611 $ 18,101,224 555,393 559,178 577,697 605,809 760,807
76,077 4,888 1,971 35,670 5,190
260,504 250,905 232,180 286,038 319,713
160,043 153,619 260,150 339,214 331,821
108,954 91,210 44,676 115,306 143,851
680,790 801,390 1,213,507 2,242,909 1,735,759
118,731 134,144 129,594 139,958 155,723
1,960,492 1,995,334 2,459,775 3,764,904 3,452,864
4,742,528 4,817,512 5,102,750 5,231,784 5,112,107
1,463,857 1,418,281 1,415,118 1,565,759 1,953,239
64,702 47,762 37,682 48,775 56,068
1,827,984 1,248,222 1,452,986 1,470,179 1,826,086
35,716 4,707 22,978 166,715 43,735
8,134,787 7,536,484 8,031,514 8,483,212 8,991,235
$ 10,095,279 $ 9,531,818 $ 10,491,289 $ 12,248,116 $ 12,444,099 I\.)
CX)
CX)
Net (Expense)/Revenue:
Governmental Activities
Business-type Activities
Total Net Expense
General Revenues
Governmental Activities:
Taxes:
Property taxes
Transient occupancy taxes
Sales taxes
Other taxes
Investment earnings
Miscellaneous
Transfers
Special Item
Total general revenues, transfers and
special item
Business-type Activity
Investment earnings
Miscellaneous
Transfers
Total Business-type Activities
Total primary government
Change in net position:
Change in reporting of Component unit
Governmental activities
Business-type activities
Total Changes in Net Position
2014 2015
$ (5,098,659) $ (5,388,819)
284,719 593,711
$ (4,813,940) $ (4,795,108)
$ 1,096,028 $ 1,140,579
3,425,309 3,833,644
1,153,845 1,241,436
237,256 247,173
16,503 25,323
(1,200) (1,200)
5,927,741 6,486,955
1,200 1,200
1,200 1,200
$ 5,928,941 $ 6,488,155
$ $
829,082 1,098,136
285,919 594,911
$ 1,115,001 $ 1,693,047
Schedule 2 (continued)
City of Solvang
Changes in Net Position
Last Ten Fiscal Years
(accrual basis of accounting)
Fiscal Year
2016 2017 2018
$ (5,668,802) $ (5,455,281) $ (5,824,131)
1,143,461 454,590 413,439
$ (4,525,341) $ (5,000,691) $ (5,410,692)
$ 1,213,316 $ 1,283,266 $ 1,380,568
4,195,940 4,330,599 4,320,318
1,226,777 1,453,808 1,405,281
248,247 233,572 286,790
43,499 48,294 109,264
(2,000) (852,390) (306,500)
6,925,779 6,497,149 7,195,721
2,000 852,390 306,500
2,000 852,390 306,500
$ 6,927,779 $ 7,349,539 $ 7,502,221
$ $ $
1,256,977 1,041,868 1,371,590
1,145,461 1,306,980 719,939
$ 2,402,438 $ 2,348,848 $ 2,091,529
2019 2020 2021 2022 2023
$ (7,464,746) $ (8,510,502) $ (6,124,881) $ (5,943,182) $ (6,807,949) (66,250) (850,716) (500,361) (81,313) 1,150,824
$ (7,530,996) $ (9,361,218) $ (6,625,242) $ (6,024,495) $ (5,657,125) $ 1,401,623 $ 1,480,839 $ 1,542,764 $ 1,623,747 $ 1,754,910 4,618,425 3,440,275 4,078,826 6,031,568 6,311,438
1,507,745 1,347,670 1,606,443 2,118,762 2,517,643
232,707 273,226 287,548 288,349 345,486
413,701 364,465 9,490 (145,251) 379,069
34,436 118,250 45,425 103,903 279,700
(311,467) 102,992 (697,967) (57,968) (93,000)
7,897,170 7,127,717 6,872,529 9,963,110 11,495,246
258,866 211,189 12,236 (48,721) 199,569
311,467 (102,992) 697,967 57,968 93,000
570,333 108,197 710,203 9,247 292,569
$ 8,467,503 $ 7,235,914 $ 7,582,732 $ 9,972,357 $ 11,787,815 $ $ 99,414 $ $ $
432,424 (1,283,371) 747,648 4,019,928 4,687,297
504,083 (742,519) 209,842 (72,066) 1,443,393
$ 936,507 $ (1,926,476) $ 957,490 $ 3,947,862 $ 6,130,690 I\.)
CX)
<.O
2014 2015
General Fund
Nonspendable $ 700 $ 127,805
Restricted 13,291 14,290
Committed 3,570,693 3,619,902
Assigned
Unassigned 3,767,385 4,871,659
Reserved
Unreserved
Total general fund $ 7,352,069 $ 8,633,656
All other governmental funds
Nonspendable $ $
Restricted 3,143,036 2,997,035
Committed
Assigned
Unassigned
Reserved
Unreserved
Special Revenue
Capital Projects
Other Purposes
Total all other governmental funds $ 3,143,036 $ 2,997,035 Note: The provisions of GASS Statement Number 54 were applied prospectively from fiscal year 2011 forward and that years prior to that have not been restated to conform with the GASB 54.
$
$
$
$
Schedule 3
City of Solvang
Fund Balances of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
Fiscal Year
2016 2017 2018
76,502 $ 82,192 $ 85,451 $
18,680 12,206 58,837
4,127,320 4,127,320 4,830,633
5,345,636 5,824,932 5,937,175
9,568,138 $ 10,046,650 $ 10,912,096 $
$ 275,000 $ 275,000
3,180,161 3,315,997 3,154,345
3,180,161 $ 3,590,997 $ 3,429,345 $
2019 2020 2021 2022 2023
337,809 $ 229,904 $ 100,412 $ 234,925 $ 17,390
298,837 26,612 26,315 26,315 26,315
4,830,633 4,830,633 4,830,633 4,830,633 7,266,377
526,726
5,913,948 5,161,009 6,179,842 9,459,376 10,335,782
11,381,227 $ 10,248,158 $ 11,663,928 $ 14,551,249 $ 17,645,864 3,144,770 3,409,157 3,519,218 3,375,286 3,472,258
(21,695) (77,681) (23,823) (19,876)
3,123,075 $ 3,331,476 $ 3,495,395 $ 3,375,286 __j_______l,452,382 I\.)
<.O
0 REVENUES
Taxes
Licenses and permits
Fines and forfeits
Charges for services
Special assessments
Intergovernmental
Investment earnings
Other revenues
Total Revenues
EXPENDITURES
General government
Public safety
Culture and recreation
Public works
Community development
Housing
Capital outlay
Transportation
Intergovernmental
Debt service:
Costs of issuance
Principal
Interest
Total expenditures
Excess (Deficiency) of Revenues over
Expenditures
Other Financing Sources (Uses)
Transfers in
Transfers out
Change in reporting of component unit
Total Other Financing Sources (Uses)
Net change in fund balances
Debt service as a percentage of noncapital
expenditures
2014 2015
$ 5,922 $ 6,463
280 224
22 11
984 982
75 111
638 731
24 34
15 6
7,960 8,562
1,393 1,547
1,628 1,644
1,592 1,592
1,717 1,837
455 517
394
6,785 7,531
1,175 1,031
169 161
(170) (162)
169 161
$ 1,344 $ 1,192
0.00% 0.00%
Schedule 4
City of Solvang
Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years
(In Rounded Thousands of Dollars)
(modified accrual basis of accounting)
Fiscal Year (endin!j June 30)
2016 2017 2018
$ 6,885 $ 7,301 $ 7,393 $
203 184 111
9 9 9
956 920 962
153 203 202
619 1,489 618
57 64 150
47 209 203
8,929 10,379 9,649
1,951 1,669 1,546
1,631 1,662 1,734
1,695 1,654 1,989
2,068 3,255 1,941
464 434 560
869
7,809 8,674 8,638
1,120 1,705 1,010
176 431 175
(178) (1246) (482)
176 431 175
$ 1,296 $ 2,136 $ 1,186 $
0.00% 0.00% 0.00%
2019 2020 2021 2022 2023
7,761 $ 6,542 $ 7,516 $ 10,062 $ 10,929
127 126 129 215 278
7 4 7 0.48 0.05
834 722 765 948 1,039
193 207 215 218 219
708 918 1,334 2,383 1,916
374 327 11 (115) 354
121 136 54 104 281
10,124 8,982 10,031 13,816 15,016
1,762 2,467 1,803 3,020 2,864
1,814 2,023 1,855 2,201 2,366
1,952 2,195 1,505 1,096 1,147
1,649 1,534 1,475 2,142 2,652
776 622 747 780 830
1,597 1,164 1,059 1,849 2,182
9,550 10,004 8,444 11,088 12,041
574 (1,022) 1,588 2,729 2,975
176 156 920 1,985 2,480
(588) (156) (926) (1946) (2283)
97 176 97 (6) 39 197
750 $ (925) $ 1,582 $ 2,767 $ 3,172
0.00% 0.00% 0.00% 0.00% 0.00%
Schedule 5
Assessed Value and Estimated Actual Value of Taxable Property Last Ten Fiscal Years
(in thousands of dollars)
Assessed Taxable Values
Fiscal Real Personal Total Direct
Year Property Property Totals Tax Rate
2013-2014 934,243 35,746 $ 969,989 1.00%
2014-2015 979,763 32,966 $ 1,012,729 1.00%
2015-2016 1,041,231 30,866 $ 1,072,097 1.00%
2016-2017 1,105,535 32,355 $ 1,137,891 1.00%
2017-2018 1,168,412 33,137 $ 1,201,549 1.00%
2018-2019 1,224,324 34,740 $ 1,259,064 1.00%
2019-2020 1,285,410 39,041 $ 1,324,451 1.00%
2020-2021 1,329,682 40,297 $ 1,369,979 1.00%
2021-2022 1,383,585 40,903 $ 1,424,487 1.00%
2022-2023 1,482,074 43,256 $ 1,525,331 1.00%
Source: County of Santa Barbara Assessor's Office
Note: In 1978 the voters of the State of California passed Proposition 13 which limited taxes to a total maximum rate of 1 % based upon the assessed value of the property being taxed. Each year, the assessed value of property maybe increased by an inflation factor (limited to a maximum of2%). With few exceptions, property is only reassessed as a result of new construction activity or at the time it is sold to a new owner. At that point, the property is reassessed based upon the added value of the construction or at the purchase price (market value) or economic value of the property sold. The assessed valuation data shown above (in our reports) represents the only data currently available with respect to the actual market value of taxable property and is subject to the limitations described above.
291
Schedule 6
City of Solvang
Direct and Overlapping Property Tax Rates
For The Last Ten Fiscal Years
(Rates per $100 of assessed value)
Gitt Direct Rate Overlapping Rates
General
Fiscal Basic Obligation School Special
Year Rate Debt Rate Total Districts Districts
2013-2014 1.00% 0.00% 1.00% 0.05256% 0.00000%
2014-2015 1.00% 0.00% 1.00% 0.05256% 0.00000%
2015-2016 1.00% 0.00% 1.00% 0.05256% 0.00000%
2016-2017 1.00% 0.00% 1.00% 0.05256% 0.05762%
2017-2018 1.00% 0.00% 1.00% 0.06631% 0.06313%
2018-2019 1.00% 0.00% 1.00% 0.06362% 0.06197%
2019-2020 1.00% 0.00% 1.00% 0.06294% 0.05583%
2020-2021 1.00% 0.00% 1.00% 0.06294% 0.05646%
2021-2022 1.00% 0.00% 1.00% 0.06711% 0.05825%
2022-2023 1.00% 0.00% 1.00% 0.06667% 0.04984%
Source: California Municipal Statistics
Note: The City's direct property tax rates can only be changed with specific voter approval. 292
Schedule 7
City of Solvang
Principal Property Tax Payers - Top Ten Payers
Last Ten Fiscal Years
(Dollar Amounts in Thousands)
2023 2022
Percentage of Percentage of
Taxable Total City Taxable Total City
Assessed Taxable Assessed Taxable
Taxea:rer Value Rank Assessed Value Taxea:rer Value Rank Assessed Value Santa Ynez Band of Mission Indians $ 29,879
--
1 --
1.96% Santa Ynez Band of Mission Indians $ 29,345
--
1 - 2.06%
Worldmark,The Club 20,135 2 1.32% Worldmark,The Club 17,838 2 1.25% Lombard Street, LP 17,546 1.15% Lombard Street, LP 17,243 1.21% Alisal Guest Ranch 16,549 4 1.08% Alisal Guest Ranch 15,452 4 1.08% SYBCI California Hotel No. 2, LLC 14,875 5 0.98% SYBCI California Hotel No. 2, LLC 14,613 5 1.03% Solvang Hotel Group, LP 14,311 6 0.94% Solvang Hotel Group, LP 14,014 6 0.98% Petersen Village Inn, LP 9,378 7 0.61% Alisal Oaks, LLC 8,090 7 0.57% Alisal Oaks, LLC 8,251 8 0.54% Wine Manor Management, LLC 7,002 8 0.49% Wine Manor Management, LLC 7,139 9 0.47% Oak Park Leasing, LLC 6,856 9 0.48% FLT Oak Park FL TE LLC 6,993 10 0.46% MP Paso, LLC 6,196 10 0.43% Total $ 145,055 9.51% Total $ 136,649 9.59%
2021 2020
Percentage of Percentage of
Taxable Total City Taxable Total City
Assessed Taxable Assessed Taxable
Taxea:rer Value Rank Assessed Value Taxea:rer Value Rank Assessed Value Santa Ynez Band of Mission Indians $ 29,072
--
1 --
2.12% Santa Ynez Band of Mission Indians $ 28,555
--
1 - 2.16%
Worldmark,The Club 17,838 2 1.30% Worldmark,The Club 17,505 2 1.32% Lombard Street, LP 16,935 1.24% Lombard Street, LP 16,398 1.24% Alisal Guest Ranch 15,107 4 1.10% Alisal Guest Ranch 14,373 4 1.09% SYBCI California Hotel No. 2, LLC 14,478 5 1.06% SYBCI California Hotel No. 2, LLC 14,224 5 1.07% Solvang Hotel Group, LP 13,864 6 1.01% Solvang Hotel Group, LP 11,598 6 0.88% Garfield Beach CVS, LLC 8,660 7 0.63% 1980s Old Mission Drive, LLC 8,353 7 0.63% Alisal Oaks, LLC 8,007 8 0.58% Alisal Oaks, LLC 7,851 8 0.59% Wine Manor Management, LLC 6,931 9 0.51% Wine Manor Management, LLC 6,798 9 0.51% Oak Park Leasing, LLC 6,786 10 0.50% Oak Park Leasing, LLC 6,654 10 0.50% Total $ 137,678 10.05% Total $ 132,308 9.99%
2019 2018
Percentage of Percentage of
Taxable Total City Taxable Total City
Assessed Taxable Assessed Taxable
Taxea:rer Value Rank Assessed Value Taxea:rer Value Rank Assessed Value Santa Ynez Band of Mission Indians $ 28,047
--
1 --
2.23% Santa Ynez Band of Mission Indians $ 27,550
--
1 - 2.29%
Worldmark,The Club 17,178 2 1.36% Worldmark,The Club 16,400 2 1.36% Alisal Guest Ranch 13,995 3 1.11% SYBCI California Hotel, No. 2, LLC 13,730 1.14% SYBCI California Hotel, No. 2, LLC 13,974 4 1.11% Alisal Guest Ranch 13,159 4 1.10% Lombard Street, LP 12,376 5 0.98% Palm Springs Inn, LLC 12,136 1.01% Solvang Hotel Group, LP 10,978 6 0.87% Solvang Hotel Group, LP 10,763 6 0.90% Alisal Oaks, LLC 7,698 7 0.61% Alisal Oaks, LLC 7,548 7 0.63% Wine Manor Management, LLC 6,668 8 0.53% Wine Manor Management, LLC 6,540 8 0.54% 1980S Old Mission Drive, LLC 6,645 9 0.53% Oak Park Leasing, LLC 6,369 9 0.53% Oak Park Leasing, LLC 6,524 10 0.52% MP Paso, LLC 5,303 10 0.44% Total $ 124,083 9.86% Total $ 119,498 9.95%
2017 2016
Percentage of Percentage of
Taxable Total City Taxable Total City
Assessed Taxable Assessed Taxable
Taxea:rer Value Rank Assessed Value Taxea:rer Value Rank Assessed Value Santa Ynez Band of Mission Indians $ 27,063
--
1 --
2.38% Santa Ynez Band of Mission Indians $ 26,696
--
1 - 2.49%
Worldmark, The Club 16,000 2 1.41% Worldmark,The Club 17,877 2 1.67% SYBCI California Hotel, No. 2, LLC 13,490 1.19% SYBCI California Hotel, No. 2, LLC 13,310 1.24% Alisal Guest Ranch 12,337 4 1.08% Alisal Guest Ranch 12,489 4 1.16% Palm Springs Inn, LLC 11,901 5 1.05% Solvang Hotel Group, LP 10,393 5 0.97% Solvang Hotel Group, LP 10,552 6 0.93% Palm Springs Inn LLC 7,519 6 0.70% Alisal Oaks, LLC 7,401 7 0.65% Alisal Oaks, LLC 7,290 7 0.68% Wine Manor Management, LLC 6,415 8 0.56% Wine Manor Management, LLC 6,321 8 0.59% Cook, Frieda Survivors Trust 6,272 9 0.55% Cook, Frieda Survivors Trust 6,178 9 0.58% Skytt Properties, LLC 6,245 10 0.55% MP Paso, LLC 5,121 10 0.48% Total $ 117,676 10.34% Total $ 113,194 10.56%
2015 2014
Percentage of Percentage of
Taxable Total City Taxable Total City
Assessed Taxable Assessed Taxable
Taxea:rer Value Rank Assessed Value Taxea:rer Value Rank Assessed Value Santa Ynez Band of Mission Indians $ 26,226
--
1 --
2.59% Santa Ynez Band of Mission Indians $ 26,108
--
1 - 2.69%
Worldmark, The Club 17,543 2 1.73% Worldmark,The Club 17,467 2 1.80% Skytt Properties, LLC 14,927 1.47% SYBCI California Hotel, No. 2, LLC 13,026 1.34% SYBCI California Hotel, No. 2, LLC 13,078 4 1.29% Alisal Guest Ranch 12,743 4 1.31% Alisal Guest Ranch 12,477 5 1.23% Solvang Hotel Group, LP 10,144 1.05% Solvang Hotel Group, LP 10,190 6 1.01% Kabir Bluestar, LLC 8,879 6 0.92% NWK1, Inc 7,740 7 0.76% Alisal Oaks, LLC 7,116 7 0.73%
Kabir Bluestar, LLC 7,375 8 0.73% Cook, Frieda Survivors Trust 6,030 8 0.62% Alisal Oaks, LLC 7,148 9 0.71% NWK1, Inc 5,889 9 0.61%
Cook, Frieda Survivors Trust 6,057 10 0.60% Copper Alisal Holdings, LLC 5,520 10 0.57% Total $ 122,761 12.12% Total $ 112,922 11.64%
Source: Santa Barbara County Assessor's Oflicc
293
Schedule 8
City of Solvang
Property Tax Levies and Collections
Last Ten Fiscal Years
Collections within the Fiscal Total Collections
Year of the Levy To Date
Collections in
Total Tax Levy Percentage of Subsequent Amount Percentage of Fiscal Year for Fiscal Year Amount Levy Years Collected Levy 2013-14 606,613 601,774 99.2% 4,619 606,392 100.0%
2014-15 631,868 626,577 99.2% 4,985 631,562 100.0%
2015-16 667,906 661,254 99.0% 5,110 666,364 99.8%
2016-17 708,584 702,791 99.2% 4,530 707,321 99.8%
2017-18 747,495 738,881 98.8% 7,068 745,949 99.8%
2018-19 780,734 771,772 98.9% 7,011 778,783 99.8%
2019-20 821,350 809,645 98.6% 9,355 819,000 99.7%
2020-21 849,985 838,261 98.6% 9,332 847,592 99.7%
2021-22 886,964 877,202 98.9% 6,138 883,340 99.6%
2022-23 949,927 938,165 98.8% 938,165 98.8%
Source: Santa Barbara County Auditor-Controller's Office Note: Figures listed above are only representative of Secured taxes collected. 294
Schedule 9
City of Solvang
Transient Occupancy Tax - Principal Payers and Other Data Last Ten Fiscal Years
Transient Occupancy Tax
Revenues in Dollars
Concentration By Hotel Size Based
on Number of Rooms
Number Hotels Number Hotels
City Wide
Occupancy Average Daily 50 or More Under 50
Fiscal Year Rate Room Rates Rooms Rooms
2014 68% $ 147.54 $ 2,469,434 $ 964,365
6 11
2015 72% $ 171.08 $ 2,766,680 $ 1,063,561
6 17
2016 74% $ 191.84 $ 2,813,475 $ 1,368,750
6 18
2017 72% $ 188.51 $ 2,852,189 $ 1,477,881
6 18
2018 70% $ 166.43 $ 3,203,410 $ 1,116,882
7 18
2019 71% $ 176.56 $ 3,397,220 $ 1,143,566
7 19
2020 55% $ 177.98 $ 2,391,340 $ 982,733
7 21
2021 59% $ 193.40 $ 2,684,185 $ 1,404,844
8 21
2022 77% $ 227.49 $ 4,362,416 $ 1,665,365
8 22
2023 74% $ 250.75 $ 4,602,304 $ 1,705,808
8 26
Source: City of Solvang Finance Department
Penalties and Interest are not included in these figures. 295
Fiscal
Year
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
Schedule 10
City of Solvang
Water Rates
Last Ten Fiscal Years
Rate
Monthly Per CCF
Base Rate (748 Gallons)
69.081 3.162
3.713
72.711 3.162
3.713
75.431 3.452
4.053
75.431 3.452
4.053
75.431 3.452
4.053
75.431 3.452
4.053
75.431 3.452
4.053
75.431 3.452
4.053
75.431 3.452
4.053
75.081 4.082
4.623
5.354
Source: City of Solvang Finance Department
Notes:
( 1) This rate is for a 5/8" meter
Outside
Users
Rate �er CCF
4.74 5.57
4.74 5.57
5.18 6.08
5.18 6.08
5.18 6.08
5.18 6.08
5.18 6.08
5.18 6.08
5.18 6.08
5.18 6.08
(2) The City of Solvang went to three tiered rates, effective August I, 2022.
This rate is for Oto 1500 Cubic Feet.
(3) This rate is for 150 I - 3500 Cubic Feet.
(4) This rate is for 3501 Cubic Feet and above.
296
Schedule 11
City of Solvang
Water Revenue Concentration Data
Last Ten Fiscal Years
Water Revenue Concentration Data
Class of Customer
Single Family Multi Family
Residential Residential Commercial Other
Fiscal
Year Revenue in Dollars and Number of Customers Totals
2014 2,755,279 353,455 771,435 733,473 4,613,643
1,695 69 226 118 2,108
2015 2,621,212 295,474 824,286 618,427 4,359,400
1,734 70 226 118 2,148
2016 2,667,228 289,436 819,771 588,547 4,364,982
1,767 70 226 118 2,181
2017 2,762,880 309,802 774,336 637,288 4,484,306
1,780 70 222 115 2,187
2018 2,973,360 322,513 796,271 704,473 4,796,616
1,781 71 223 113 2,188
2019 2,902,029 321,349 801,045 662,831 4,687,254
1,781 71 224 113 2,189
2020 3,018,851 321,125 752,049 671,384 4,763,409
1,781 71 224 113 2,189
2021 3,193,794 335,547 771,099 747,515 5,047,955
1,781 71 224 113 2,189
2022 3,190,974 356,623 831,794 764,939 5,144,331
1,769 75 213 120 2,177
2023 3,117,121 386,972 844,183 694,659 5,042,935
1,774 76 212 129 2,191
Source: City of Solvang Finance Department
Notes: Connection fees, Interest Income and Transfers are not included in the above figures. 297
2023
Alisal Guest Ranch
Brookside Association
Chumash Casino Resort
City of Solvang
Mission Oaks
Rancho S.Y. Mobile Estates
Svendsgaard's Lodge
The Landsby/Mad&Vin
Vinland Hotel
World mark
2019
Alisal Guest Ranch
Atterdag Village
Chumash Casino Resort
City of Solvang
Mission Oaks
Rancho S.Y. Mobile Estates
Solvang Mesa, LLMD
Solvang School
Vacations Inn Solvang
Worldmark
2015
Alisal Guest Ranch
Atterdag Village
Chumash Casino Resort
City of Solvang
Hadsten House
Inland Pacific Builders
Mission Oaks
Rancho S.Y. Mobile Estates
Solvang School
Worldmark
Schedule 12
City of Solvang
Principal Water Sale Purchasers - Top Ten
Last Ten Fiscal Years
(In Alphabetical Order)
Fiscal Years Ended June 30
2022
Alisal Guest Ranch
Atterdag Village
Chumash Casino Resort
City of Solvang
Mission Oaks
Rancho S.Y. Mobile Estates
Solvang Mesa, LLMD
The Landsby/Mad&Vin
Turtle Hospitality
Worldmark
2018
Alisal Guest Ranch
Atterdag Village
Chumash Casino Resort
City of Solvang
Holiday Inn Express
Mission Oaks
Rancho S.Y. Mobile Estates
Solvang Mesa, LLMD
Solvang School
World mark
2014
Alisal Guest Ranch
Atterdag Village
Chumash Casino Resort
City of Solvang
Hadsten House
Holiday Inn Express
Inland Pacific Builders
Mission Oaks
Rancho S.Y. Mobile Estates
Solvang School
2021
Alisal Guest Ranch
Atterdag Village
Chumash Casino Resort
City of Solvang
Mission Oaks
Rancho S.Y. Mobile Estates
Solvang Mesa, LLMD
SY Cottage Hospital
The Landsby/Mad&Vin
World mark
2017
Alisal Guest Ranch
Atterdag Village
Chumash Casino Resort
City of Solvang
Hadsten House
Holiday Inn Express
Mission Oaks
Rancho S.Y. Mobile Estates
Solvang School
Worldmark
Source: City of Solvang Finance Department
2020
Alisal Guest Ranch
Atterdag Village
Chumash Casino Resort
City of Solvang
Mission Oaks
Rancho S.Y. Mobile Estates
Solvang Mesa, LLMD
Solvang School
Vinland Hotel
Worldmark
2016
Alisal Guest Ranch
Atterdag Village
Chumash Casino Resort
City of Solvang
Hadsten House
Holiday Inn Express
Inland Pacific Builders
Mission Oaks
Rancho S.Y. Mobile Estates
World mark
298
I\.)
<.O
<.O
Fiscal
Year
General
Obligation
Bonds
Lease
Revenue
Bonds
Special
Assessment
Bonds1 Notes
Governmental Activities
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
Notes:
(I) Presented net oforiginal discounts and premiums
(2) Personal income is disclosed on Schedule 17.
(3) California Department of Finance
Schedule 13
City of Solvang
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
(Dollars in Thousands except for Per Capita)
Lease
Obli_g_ations
Lease
Obli_g_ations
Installment
A_g_reement
Business-tte_e Activities
Total
Outstanding
Debt
Percentage of
Personal
Income
0%2
--
0%2
--
0%2
--
0%2
--
0%2
--
0%2
--
0%2
--
0%2
--
0%2
--
0%2
Po_e_ulation
53363
54493
54953
56023
56133
55753
55623
58583
57093
59863
...!
-
...!
-
...!
-
...!
-
...!
-
...!
-
...!
-
...!
-
...!
-
$
Debt per
Ca_e_ita
Schedule 14
City of Solvang
Direct and Overlapping Governmental Activities Debt
As of June 30, 2023
Governmental Unit:
Direct and Overlapping General Fund Debt
Santa Barbara County Certificates of Participation
Santa Ynez Valley Union High School District COP
Total Gross Direct and Overlapping General Fund Debt
Less: Santa Barbara County Supported Obligations
Total Net Direct and Overlapping General Fund Debt
Overlapping Tax and Assessment Debt
Allan Hancock Joint Community College District
Santa Ynez Valley Union School District
Buellton Union School district
Solvang School District
Total Overlapping Tax and Assessment Debt
Subtotal, overlapping debt
City of Solvang direct debt
Total direct and overlapping debt
Source: California Municipal Statistics, Inc.
Notes:
Debt
Outstanding
$ 23,640,000
1,058,000
$ 127,605,032
$ 10,630,000
11,364,568
8,393,721
( 1) Overlapping governments are those that coincide, at least in part with geographic boundaries of the city. This schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the property taxpayers of the City of Solvang. This process recognizes that, when considering the government's ability to issue and repay long-term debt, the entire debt burden borne by the property taxpayers should be taken into account. However, this does not imply that every taxpayer is a resident, and therefore responsible for repaying the debt, of each overlapping government. (2) The percentage of overlapping debt applicable to the City is estimated using taxable assessed property value. Applicable percentages were estimated by determining the portion of the overlapping district's assessed value that is within the boundaries of the City, divided by the district's total taxable assessed value.
(3) Excludes tax and revenue anticipation notes, enterpirse revenue, mortgage revenue and non-bonded capital lease obligations.
Estimated
Percentage
Applicable2
1.495%
18.466%
4.582%
18.466%
0.900%
81.695%
Amount
Applicable to
Primary
Government
$ 353,418
$ 195,370
$ 548,788
$ (21,977)
$ 526,811
$ 5,846,863
$ 1,962,936
$ 102,281
$ 6,857,250
$ 14,769,330
$ 15,318,118 3
$ 15,296,141
300
Schedule 15
City of Solvang
Legal Debt Margin Information
Last Ten Fiscal Years
Total Debt
Fiscal Debt Applicable
Year Limit To Limit
2014 $ 36,374,577 $
2015 $ 37,977,325 $
2016 $ 40,226,713 $
2017 $ 42,670,909 $
2018 $ 45,058,074 $
2019 $ 47,214,897 $
2020 $ 49,930,185 $
2021 $ 51,638,388 $
2022 $ 53,679,796 $
2023 $ 57,199,898 $
Legal Debt Margin Calculation for Fiscal Year 2023
Assessed Value
Debt Limit (3.75% of assessed value)
Less debt applicable to limit:
General Obligation bonds
Total debt applicable to limit
Legal Debt Margin
$ 1,525,330,622
57,199,898
0 0
$ 57,199,898
Sources: Santa Barbara County Assessor's Office and California Municipal Statistics, Inc.
Note: California Government Code, Section 43605 sets the debt limit at 15%. The code section Total Debt
Applicable
To Limit as
Percentage
of Debt Limit
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
was enacted when assessed valuations were based on 25% of full market value. This has since changed to 100% of full market value. Thus the limit shown is 3.75%, one-fourth the limit of 15%. 301
Schedule 16
City of Solvang
Pledged Revenue Coverage
Last Ten Fiscal Years
Special Assessment Bonds
Debt Service
Fiscal
Year
Special
Assessment
Collections Principal Interest Coverage
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
Water
Service
Revenues1
4,671,555
4,422,992
4,457,268
4,566,227
4,919,648
4,742,528
4,915,834
5,110,938
5,209,467
5,241,879
Wastewater
Service
Revenues1
1,640,187
1,623,447
1,736,952
1,669,291
1,824,725
1,763,132
1,499,245
1,417,321
1,552,271
1,988,868
Source: City of Solvang Finance Department
Notes:
Water Installment Agreement and Lease
Capital Less Net
Impact Operating Available
Fees Expenses2 Revenue
481,283 4,842,994 309,844
497,405 4,541,401 378,996
294,184 3,851,606 899,846
102,409 3,771,037 897,599
26,455 4,023,666 922,437
35,716 4,558,594 219,650
4,707 4,566,663 353,878
22,978 4,930,863 203,053
166,715 4,878,634 497,548
43,735 3,949,155 1,336,459
Wastewater Lease Obligation
Capital Less Net
Impact Operating Available
Fees Expenses2 Revenue
265,619 1,338,696 567,110
320,403 1,390,063 553,787
201,661 1,315,685 622,928
90,875 1,630,740 129,426
14,020 1,682,663 156,082
1,944,950 (181,818)
2,052,784 (553,539)
1,802,726 (385,405)
1,797,484 (245,213)
1,908,087 80,781
(!) Water and wastewater revenues include operating revenues and interest revenues. (2) Operating Expenses exclude depreciation and amortization Debt Service
Principal Interest Coverage
Debt Service
Principal Interest Coverage
302
Schedule 17
City of Solvang
Demographic and Economic Statistics
For The Last Ten Fiscal Years
Fiscal Year Population 1
2014 5336
2015 5449
2016 5495
2017 5602
2018 5613
2019 5575
2020 5562
2021 5858
2022 5709
2023 5986
Sources: City of Solvang Finance Department
Notes:
(I) State of California, Department of Finance
(2) United States Census Bureau
Personal Income
217,297,928
216,957,384
216,140,330
224,797,056
225,238,464
242,462,325
250,395,678
297,826,578
325,144,677
370,329,876
(3) State of California, Employment Development Department Per Capita
Personal
lncome2
40,723
39,816
39,334
40,128
40,128
43,491
45,019
50,841
56,953
61,866
Unemployment
Rate3
2.60%3
7.10%3
7.14%3
3.45%3
2.30%3
3.00%3
6.20%3
4.30%3
4.20%3
2.90%3
303
Schedule 18
City of Solvang
Ten Largest Principal Employers
Last Nine Fiscal Years
Fiscal Year Ended June 30, 2023 Fiscal Year Ended June 30, 2022 Fiscal Year Ended June 30, 2021 Percentage of Percentage of Percentage of
Number of Total City Number of Total City Number of Total City Employer Employees � Employment1 Employer Employees � Employment1 Employer Employees � Employment1 Alisal Guest Ranch 350 11.29% Alisa! Guest Ranch 389 13.41% Alisal Guest Ranch 326 10.87% Atterdag Village (formerly Atterdag Village (formerly Atterdag Village (formerly Solvang Lutheran Home) 187 6.03% Solvang Lutheran Home) 182 6.28% Solvang Lutheran Home) 163 5.43% Santa Ynez Cottage
Hospital 130 4.19% New Frontiers Market 101 3.48% New Frontiers Market 107 3.57% Santa Ynez Cottage Santa Ynez Cottage
New Frontiers Market 95 3.06% Hospital 101 3.48% Hospital 88 2.93% Solvang Unified School
District 76 2.45% Landsby/Mad & Vin 76 2.62% Landsby/Mad & Vin 69 2.30% Solvang Unified School
Landsby/Mad&Vin 70 2.26% Valley Fresh Market 67 2.31% District 68 2.27% Solvang Unified School
Valley Fresh Market 58 1.87% District 62 2.14% Valley Fresh Market 65 2.17% Hotel Corque 56 1.81% Solvang Brew 52 1.79% Solvang Brew 51 1.70% Solvang Brew 46 1.48% Hotel Corque 37 1.28% Hotel Corque 38 1.27% Vinland Hotel and Lounge 30 10 0.97% Nielsen Building Materials 24 10 0.83% Nielsen Building Materials 27 10 0.90% Totals 1098 35.42% Totals 1091 37.62% Totals 1002 33.40% *COVID related, normal count is 58
Fiscal Year Ended June 30, 2020 Fiscal Year Ended June 30, 2019 Fiscal Year Ended June 30, 2018 Percentage of Percentage of Percentage of
Number of Total City Number of Total City Number of Total City Employer Employees � Employment1 Employer Employees � Employment1 Employer Employees � Employment1 Allsal Guest Ranch 331 11.41% Alisa! Guest Ranch 369 12.30% Alisal Guest Ranch 356 12.28% Atterdag Village (formerly Atterdag Village (formerly Atterdag Village (formerly Solvang Lutheran Home) 174 6.00% Solvang Lutheran Home) 177 5.90% Solvang Lutheran Home) 170 5.86% Santa Ynez Cottage
New Frontiers Market 103 3.55% New Frontiers Market 115 3.83% Hospital 87 3.00% Santa Ynez Cottage Santa Ynez Cottage
Hospital 93 3.21% Hospital 93 3.10% New Frontiers Market 77 2.66% Solvang Unified School
District 64 2.21% Landsby/Mad & Vin 65 2.17% Solvang Brew 68 2.34% Nielsen's Market/Valley Solvang Unified School
Valley Fresh Market 62 2.14% Fresh 64 2.13% District 58 2.00% Landsby/Mad & Vin 58 2.00% Solvang Brew 58 1.93% Landsby 55 1.90% Solvang Unified School
Hotel Corque 35 1.21% District 57 1.90% Hotel Corque 53 1.83% Nielsen Building Materials 27 0.93% Hotel Corque 54 1.80% Nielsens Market 52 1.79% Solvang Brew o· 10 0.00% Root 246 46 10 1.53% Root 246 47 10 1.62% Totals 947 32.66% Totals 1098 36.60% Totals 1023 35.28% Fiscal Year Ended June 30, 2017 Fiscal Year Ended June 30, 2016 Fiscal Year Ended June 30, 2015 Percentage of Percentage of Percentage of
Number of Total City Number of Total City Number of Total City Employer Employees � Employmenl1 Employer Employees � Employment1 Employer Employees � Employment1 Alisal Guest Ranch 303 10.45% Alisa! Guest Ranch 294 10.50% Alisal Guest Ranch 298 10.64% Atterdag Village (formerly Atterdag Village (formerly Atterdag Village (formerly Solvang Lutheran Home) 170 5.86% Solvang Lutheran Home) 167 5.96% Solvang Lutheran Home) 145 5.18% Santa Ynez Cottage Santa Ynez Cottage Santa Ynez Cottage Hospital 96 3.31% Hospital 91 3.25% Hospital 91 3.25%
Solvang Brew 75 2.59% Solvang Brew 75 2.68% Nielsens Market 69 2.46% Solvang Unified School Solvang Unified School
District 68 2.34% New Frontiers Market 70 2.50% District 65 2.32% Nlelsens Market 62 2.14% Nielsens Market 69 2.46% Solvang Brew 65 2.32% Solvang Unified School
New Frontiers Market 55 1.90% District 67 2.39% New Frontiers Market 60 2.14% Landsby 55 1.90% Hotel Corque 51 1.82% Hotel Corque 56 2.00% Hotel Corque 47 1.62% Landsby 46 1.64% Landsby 56 2.00% Root 246 42 1.45% Root 246 46 1.64% Root 246 53 1.89%
Totals 973 33.55% Totals 976 34.86% Totals 958 34.21%
Sources: City of Solvang Finance Department, State ofCalifomia Employment Development Department, and Ci1y of Solvang Employers Notes:
(1) Total City Labor Force is 2900, based on State ofCalifomia Employment Development Department Data for FY 2021-22.
The City implemented GASB Statement Number 44 in the 2006 fiscal year, and therefore infonnation in this schedule is being provided prospectively from the year of implementation. 304
Schedule 19
City of Solvang
Full-Time Equivalent City Government Employees by Function/Program Last Ten Fiscal Years
Fiscal Year
Function/Program 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 General government:
City Council (Stipend) 1
City clerk 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00
City attorney (Contract)2
City manager 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 Economic development
Finance/Ad min 5.00 5.00 5.00 5.00 5.00 5.00 3.00 6.00 4.00 2.00 Public safety2:
Police (Contract)
Fire
Plannin
Planning 2.22 2.22 2.22 2.22 2.25 2.25 1.00 1.50
Building and safety2 0.90 0.90 0.90 0.90 0.95 0.95
Public works:
Engineering 0.65 1.20 1.20 1.55 2.10 2.10 1.20 1.00 0.20 0.20 Roads and streets 3.95 4.05 4.05 3.85 4.05 4.05 3.00 4.65 2.50 2.90 Maintenance 2.51 2.51 2.51 2.51 1.65 1.65 1.05 3.15 2.30 2.90 Parks:
I Parks and recreation 5.84 5.84 5.84 5.81 5.30 5.00 2.00 4.00 2.00 I 2.00 I Water:
I Treatment and distribution 5.00 5.15 5.15 5.10 5.05 5.05 4.90 5.05 5.05 I 5.oo I Wastewater:
I Collection and treatment 6.90 7.10 7.10 7.00 6.95 6.95 5.85 6.95 6.95 I 5.oo I Totals 34.97 35.97 35.97 35.94 35.30 35.00 22.00 31.80 26.00 23.50 Source: The City of Solvang Finance Department.
(I) City Council are elected officials, not employees and therefore not represented. (2) No full-time equivalent employees are shown for Police, Fire, City Attorney and previous years of Building and Safety as the City had contracts for those services. 305
w
0 0)
I
I
Schedule 20
City of Solvang
Operating Indicators by Function/Program
Function/Program
Police 1:
Physical arrest
Traffic violations
Fire 1:
Emergency responses
Fires extinguished
Planning:
Building permits issued
Public Works:
Street Maintenance Centerline Miles
Parks:
Community events held
Water:
Number new connections
Daily average water
production in MGD
Daily average water
consumption in MGD
Wastewater:
Number new connections
Daily average treatment
in millions gallons(MGD)
2014 2015
96 102
125 67
430 358
9 9
218 146
0 0.44
21 21
38 40
1.38 1.05
1.26 0.96
35 43
0.71 0.69
Source: City of Solvang Finance Department and County of Santa Barbara Last Ten Fiscal Years
Fiscal Year
2016 2017 2018
126 136 107
41 94 81
615 652 678
12 12 9
230 212 208
4 4 0.08
17 14 14
33 14 2
0.94 0.98 1.10
0.86 0.89 1.05
33 14 2
0.62 0.65 0.62
2019 2020 2021
154 178 105
51 99 102
845 598 652
17 11 11
205 181 256
3 3.4 3.4
14 9 3
1 1
1.07 1.14 1.23
0.98 1.01 1.17
1 1 1
0.65 0.66 0.62
(I) The City of Solvang contracts with the County of Santa Barbara to provide police services. The City is within the County jurisdiction for fire services. 2022 2023
173 126
116 98
660 450
7 10
174 275 I
3.4 3.4
11 14 1
4 1
1.16 1.12
1.09 0.91
4 1
0.63 0.70
w
0 --..J
I
Schedule 21
City of Solvang
Capital Asset Statistics by Function/Program
Last Ten Fiscal Years
Fiscal Year
Function/Program 2014 2015 2016 2017 2018 2019 2020 2021 2022 Fire1
Stations 0 0 0 0 0 0
Engines 0 0 0 0 0 0
Public Works:
Miles of streets 25 25 25 25 25 25 25 25 25
Streetlights 12 12 12 12 12 12 12 12 12
Parks and recreation:
Community centers 2 2 2 2 2 2 2 2 2
Parks 4 4 4 4 4 4 4 4 4
Park acreage 63 63 63 63 63 63 63 63 63
Water:
Miles of mains 36 36 36 36 36 36 36 36 36
Number connections 2,156 2,178 2,211 2,225 2,227 2,228 2,228 2,228 2,211 Wastewater:
Miles of sewers 42 42 42 42 42 42 42 42 42
Number connections 2,047 2,090 2,123 2,137 2,139 2,140 2,141 2,141 2,145 Maximum plant capacity 1.50 1.50 1.50 1.50 1.50 1.50 1.50 1.50 1.50 in millions of _gallons
Source: City of Solvang Finance Department and the County of Santa Barbara ( l) The City of Solvang contracts with the County of Santa Barbara to provide police services. The City is within the County jurisdiction for fire services. 2023
0 0
25 12
2 4
63 36
2,214
42 2,145
1.50 City of Solvang
Presentation to City Council
Presented by: Mitesh Desai, CPA
Partner
◄f�l�I BADAWI&ASSOCIATES
CERTIFIED PUBLIC ACCOUNT ANTS
,,.
Deliverables and Scope of the Audit
Report of Independent Auditors on City of Solvang Annual Comprehensive Financial Report (ACFR)
Report on Internal Control Over Financial Reporting and on Compliance and Other Matters
Agreed Upon Procedures -Appropriations Limit
Report on Compliance with Requirements Applicable to Each Major Program and Internal Control over Compliance in
Accordance with the Uniform Guidance
Communications With Those Charged With Governance
Letter used to summarize communication of various
significant matters to those charged with governance.
Areas of Primary Audit Emphasis
The risk of management override of controls is addressed by the following procedures:
Assignment of audit staff based on consideration of audit risk.
Procedures to incorporate an element of unpredictability in the audit from period to period.
Consideration of the selection and application of significant accounting principles.
Examination of journal entries.
Review of accounting estimates for bias.
Evaluation of business rationale for unusual transactions.
Evaluation of the appropriateness of fraud-related inquiries performed.
Areas of Primary Audit Emphasis
Revenues & Receivables : (Tax, Grants, Notes and others): Improper revenue recognitions
Governmental Funds:
Confirmed/validated property taxes, sales taxes, franchise taxes & other significant revenues/receivables.
- Proprietary Funds:
Performed analytical procedures and trends analysis on
revenues and related receivables.
Pension: Complex accounting standards
Reviewed journal entries for pension.
Reconciled amounts recorded to reports provided by CalPERS.
Tested the census information used by CalPERS.
Obtained reports from CalPERS auditors regarding plan assets and census data.
Auditors Report
Unmodified opinion
Audit performed in accordance with Generally
Accepted Auditing Standards, and Government
Auditing Standards
Financial statements are fairly presented in all material respects
Significant accounting policies have been consistently
applied
Estimates are reasonable
Disclosures are properly reflected in the financial
statements
Required Communications
Our Responsibility Under
U.S GAAS
• Opinion on whether financial
statements are fairly stated in
accordance with U.S GAAP
• Evaluate internal control over
financial reporting including tone
at the top
• Evaluate compliance with laws,
contract and grants
• Ensure financial statements are
clear and transparent
• Communicate with the governing
body
Management Responsibility
• Management is responsible for the
financial statements
• Establish and maintain internal control
over financial reporting
• Making all financial records available to
us
• Adjust the financial statements to
correct material misstatements
• Establish internal control to prevent
and detect fraud
• Inform us of all known and suspected
fraud
• Comply with laws and regulations
• Take corrective action on audit findings
Required Communications
Independence
Timing of the Audit
• It is our responsibility to maintain
independence
• We will maintain our independence by strict
adherence to the AICPA and the Board of
Accountancy rule
• Other than compiling the financial
statements, no other services performed that
could affect our independence
• Within the time frame communicated to the
City in our engagement letters
Required Communications
Significant Accounting
Policies and Unusual
Transactions
Management Judgment
and Accounting
Estimates
Sensitive Disclosures
The City adopted the following
pronouncements during the year:
• GASB Statement No. 91, Conduit Debt
• GASB Statement No. 94, Public-Private,
Public-Public Partnerships
• GASB Statement No. 96, Subscription
Based Information Technology
Arrangements
• Depreciation expense and related
accumulated depreciation
• Defined benefit Pension and OPEB plans
(actuarial assumptions)
• Summary of Significant Accounting Policies
• Cash and Investments
• Capital Assets
• Pension Plan
• Other Post-employment Benefits
Required Communications
Difficulties Encountered in
Performing the Audit
Significant Audit Adjustments and
Unadjusted Differences Considered
by Management to be Immaterial
Potential Effect on the Financial
Statements of Any Significant Risks
and Exposures
Disagreement with Management
Deficiencies in Internal Control over
Financial Reporting
None.
Management posted all proposed audit
adjustments.
No significant risks or exposures were
identified. Legal matters and potential
liabilities are disclosed in the financial
statements.
None.
No material weaknesses identified
Required Communications
Representations Requested of
Management
Management Consultation with
Other Accountants
Other Material Written
Communications
Material Uncertainties Related
to Events and Conditions
Fraud and Illegal Acts
We obtained representations from management prior
to issuance of our reports.
We are not aware of any significant accounting or
auditing matters for which management consulted
with other accountants.
Other than the engagement letters and
management representation letters, there have
been no other significant communications
There were no material uncertainties related to
events and conditions.
None noted.
New Accounting Standards
• GASB Statement No. 100 - Accounting Changes and Error Corrections-an amendment of GASB Statement No. 62
• GASB Statement No. 101 - Compensated Absences
• GASB Statement No. 102 - Compensated Absences
Questions
Mitesh Desai
[email protected]
Thank You
For Allowing Us to Provide Audit Services
to the City of Solvang
CITY COUNCIL STAFF REPORT
AGENDA ITEM 6.c
SOLVANG
SUBJECT:
Meeting Date: January 22, 2024
Discussion and Possible Action to appoint members to the Measure U Citizens Oversight Committee
PREPARED BY: Wendy Berry, Director of Administrative Services DISCUSSION:
The Measure U Citizens' Oversight Committee is an advisory committee appointed by the City Council of the City of Solvang. The purpose of the committee is to review the revenue and expenditure of funds from the Voter approved tax established by Ordinance 22-0363 and to help ensure accountability to voters regarding such expenditures. The general duties of the committee are to serve in an advisory capacity to the City Council and shall have no independent authority to expend or direct the expenditure of funds received by the City under Measure U. The Committee may conduct hearings, review reports, request funding from the City Council for independent audits of Measure U funds, receive presentations, provide comments, make findings and recommendations and issue reports to the City Council related to implementation of Measure U and the expenditure of funds received under Measure U.
The Committee shall be comprised of five (5) members. Each Council member shall appoint one (1) member of the Measure U Citizens' Oversight Committee.
Henry Haugse resides in District 2
Frank Smithsen resides in District 2
Geoff Yarema resides in District 4
Adelia Kehoe resides in District 4
Staff advertised the openings in the local paper and on the website. Applications were accepted from October 25, 2023 - December 6, 2023. Staff received five applications but on January 5, 2024 one of the applicants withdrew their application, so four applicants remain.
Staff will begin recruiting for the 5
th member by placing an ad on the website.
ALTERNATIVES:
None
FISCAL IMPACT:
None
ATTACHMENTS:
A. Committee Member applications
B. Measure U Guidelines
321
-3�0 7 _tf (;1et)\fe D
CITY OF SOLVANG, CALIFORNIA ':J OEC O 6 2023
Boards, Commissions & Committees Application
MEASURE U CITIZENS' OVERSIGHT COMMITTEE
i·y Of SOLVANG
Administration
1644 Oak Street, Solvang, CA 93463
PH (805) 688-5575 x206
Email: [email protected]
lntere.sted parties mus! .submft application to the Administration offir;e by 5:00 p. m. Wednesday. December 61 2023 Applicant's Name Henry Haugse
Are you a resident within the City of Solvang X ---No
Retired Present Occupation__ : ___________ Name of Firm _: ____________ _
Previous service on any Commission/Board/Council? ___ Yes _ X __ No If Yes, which C/B/C? ________________ When? ________ _
Are you available to attend evening meetings?
Are you able to Attend Day Meetings?
_ X__ Yes
_X __ Yes
Are you able to attend weekend community meetings or events? Do you own a business within the City of Solvang?
___ No
___ No
X --- Yes
___ Yes
Earliest Hour? __ _
___ No
X ---No
Name and Address of Business _________________________ _ Do you presently contract any services or are you otherwise employed by the City? __ Yes �No If so, what is the nature of the contract or employment? ________________ _ Professional Experience:
Program/Project Ma
1 nagement Consultant for County Sales Tax Measures in the San Francisco Bay area.
Measure counties included Santa Clara County, Contra Costa County, Alameda County and Marin County. fnformation provided on this form is pubUc information and may be made available to other applicants, members of the press, or the genera{ public. 322
Educational Background:
Cal Poly State University, San Luis Obispo. BS City and Regional Planning Civic Activities & Community Involvement:
Solvang Senior Center - Building Committee
Elks Club - Veterans Committee
Approximately how many City Council or advisory body meetings have you attended in the last 24 months? Please describe the reasons for attendance or topics of Interest? Four - Senior Center permit and funding meetings and meetings related to the use of Lot 72.
Why are you seeking the appointment to a City Council Advisory Body? My experience in the implementation of Sales Tax measures in other communities would be a benefit to the "oversight0 committee.
I hereby certify that the information contained in this application and any accompanying documents is true and correct to the best of my knowledge.
$�nature �Mr-=
Print Name ��a�gse
Date: Dec 6, 2023
Information provided on this form is public information and may be made available to other applicants, members of the press, or the general public. 323
Attachment A
CITY OF SOLVANG, CALIFORNIA
Boards, Commissions & Committees Applica:lion RECEIVED
-.i �
SOLVANG
MEASURE U CITIZENS' OVERS1GHT COMMITTEE
Administration
1644 Oak Street, Solvang, CA 93463
PH (805) 688 5575 x206
NOV 1 7 2023 I l: \ wt1
CITY OF SOLVANG Y'v�
Email: [email protected]
Interested pert/es must submit appllcetlon to the City Clerk's offlce by 5:00 p. m. Wada sdag.JJJ,cember 6,�20.23 Ap,plylng for (specific advisory Body) M lii(.aJtt.E U Lcf'�aJ � 0-.,E,t'-tQltf" l-4MM I 'T'l E"E' legal Address ____ District #-1:_
--- ·---- _______ Homa Phone: _ _.N_..,.{ ... A ........ _____ _ E-mail
Prese11t Occupation: A T'lZ:>e�e-v
ears lived in Solvang:St t,JCE 1/sf 2
Name of Fimi: NO s..s.A�l\;JJ L.L.f
Previous senirce on any CommlsslonJBoard/Council? _Yes. ./ No If Vo:i, which C/8/C? _____________ When? _______ _
Are you available to attend evening meetings? _L Yes __ No Er:nllest Hour? __ Are you able to Attend Day Meetings? _y_ Yes __ No
Afe you able to atternd weekend community meetings or events? .,/ Yes __ No Do you presently contract any services or are you otherwise employed by the City? _Yes / ND If so, what is the nature of the contract or employment? _____________ _ � Pirofesslonal Experience:
'1 ttJ Fk'""te ��T1�. rwe:tt..-t R.>�i=f? cM,R. �F �
l-A:w If c12-. !f)zA£ "l l ce: li iovp -z:c.v o( e:o 7b A: 'O\t t 5.tt,J<q. M Ut•,,h Cl PA L. �'f:;ztDNN..- ft�o $1:A.,...6" fqDVEIUJMeb.lT FvrJDIN '1 � .octJ o -a::." c LDP '"' <;, 1..-A-�c:: �Nc;-:,:foe::r � Tte tJ T�C"r.S . +tAvE �E1'1Z0 f=Nl'e b �'I� L- C./Al-t Fort.NI A N::; E..Nc ,s� FlJ)JCE' t::> w, �1-l Lc:CA'- o�,a-J 5AZ...E-S. �')1-eS, ftJ�N" 'Tff-e. LO..s:.
A-tJEi";"c..c � M e:nzdf:DL-1 ThtJ 'T1ZAN SP�"\1\T •�N ,'\-vl� T'f i'..UD 'T� s.AtJ �""'"-l�O cov,-..rr7 "'TlZtt-N�TA'l•oN �t'7"', Information provided on this form is public lnflltmaUon snd may be made available to other appllcsnts, memb91&-J 0 oftfle press, or the ge11erel pub/le.
324
Educational Background:
�•\Jli:-e..s-1...,_,, o� FLZ;fl..toA: :., �. L?N,\J�,:ry ot= VI CZ.C:,cN1A: �cf b:>C-- ot=
·l-A W 1
Civic Activities & Community Involvement:
P'll"\c;T M�: sraw�1f'C.<:::>1V1�nee-tT���<£.,
ttQC-bL «;'TIE&. �CH 0�� A$szr>etAoTtotJ J 'l!£-A@:O c:F 1:>tRE�� ��°"'�E'ft� C-Dvk::..,11,..1 L-A Mv� <:JF' eo�e2�� AR..TJ .,., c.. (
c;.)Mr1CN"e'.Ei
.,.'1 OP MA-Nf"""1TN-/ �CH L...C:'CA.L-. �T'A.1-�"1�� -; @a:2r1..gp OF "P_ttc!.E�n;,R..,; LOS.. �Et..t= U>t-.J'T"E"t"froe.t\Q..'f S.',c..1rt'1rz ,.,.,ol\l�� A't)Tv�-r��.,. c-,ef4.."T;::Vrt1t' SC,i::t::001- · oF L ,£2 :g:,A::::t,,, rL-A t �J 1 ... l(, C-,A l.-f�II\. ., .J u� (;l:§, I 1J?-� souTt:t�
Approximately how many City Council or advisory body meetings have you attended in the last 24 months? Please describe the reasons for attendance or topics of Interest? ?f-A:1,.1 ""r'D A7 l ENO t '{ "f."4-( 2-'Z a.-1) f, /-z. 7 / z. '3. C,..,.,,, c.,ZA,Jwc.JL- MEe:T-,��c .f=bR. �E'Ji!.A!-C:£.1�T<g.J.
Why are you seeking the appointment to a City Council Advisory Body? M
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C.OtJ'f;N
that the tnformatton
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contained in this
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application
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and
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any accompariylng
.. Cct•V!EtJ
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true and correct to the best of my knowledge.
Signature � ?/: <? H -:-- Dato: ll(rrz,3,,
PrlntName §� Y�
Information provided on thfs form is public information and may bs mads avallab/9 to ottrar applicants, mamb8f11 afths press, or the general public.
Wr'"iH � ..... L.. c,pn PN SA.l.l:;> TA}( �1'1""t.J.rec� / t:"t+ ( 5, C,oMMi'T,-e-f:. seE.M.� ..-ra �E. s� A-tJ t?fPoenJN1-u.-,--ro �c:«..v&. 325
RECEIVED
()J-{
CITY OF SOLVANG, CALIFORNIA
Boards, Commissions & Committees Application
MEASURE U CITIZENS' OVERSIGHT COMMITTg
DEC O 6 2023 2.: S Z'
OF SOLVANG f
lYl
--- --
so VANG Administration
1644 Oak Street, Solvang, CA 93463
PH (805) 688-5575 x206
Email: [email protected]
Interested parlies must submit applicaUon to the Administration office by 5:00 p.m. Wednesday. December 6. 2023 Applicant's Name hAAJ t;... 5:tn ftb,S0 :V
Are you a resident within the City of Solvang ___ No
Cell Phone: ---�----- Home Phone: ____ (_-"! _______ _
___ Years Lived in Solvang.:...: __...,2"""'---'-#-/-�_;,-\ __ J-___ ........... , 1_,.,,, __ o __ .1 i E-mail:
Present Occupation __ : _.._{-_�
.,_ .... l_lll_· _&_._( ______ Name of Firm:
Previous service on any CommissionJBoard/Council?
If Yes, which C/B/C?
Are you available to attend evening meetings?
Are you able to Attend Day Meetings?
i Yes
___){_ Yes
Are you able to attend weekend community meetings or events? Do you own a business within the City of Solvang?
Name an Address of Business
tA-,/ !
Yes
When?
No
No
X. Yes
Yes
)( No
JV}
Earliest Hour? g-A--11.
!No
X No
-------------------------
Do you presently contract any services or are you otherwise employed by the City? __ Yes )< No If so, what is the nature of the contract or employment? ----"-�....,,..A....;._ __________ _ Profess-ional Experience:
W llr £4 1Lj1J 7? -1Mi; C 05-fo4½ c
Information provided on this form is public information and may be made available to other applicants, members of the press, or the general public. 326
Educational Background: . _
5A 14 £t,,; 2.4--lj � {; bA .. A/J� & t; qJ I.-
Civic Activities & Community Involvement:
S0L-0A~5 J?,ofA(l,,JI � /V..-,;4-t- +: 1MoJ
Approximately how many City Council or advisory body meetings have you attended in the last 24 months? Please describe the reasons for attendance or topics of Interest? lo 'f: t,{JMMl/,'-'+t: ,k,<--'UQ,u-�t?,.._,7-,
Why are you seeking the appointment to a City Council Advisory Body? -1: (µ'ouLJ L1/(f' •f4f' OfPl'LfuN/-fY ---fc.J SPLu';e, +�-,:-, Co,11,MV-ufy I hereby certify that the information contained in this application and any accompanying documents is true and correct to the best �edge.
Signature d t/ __.'.::._ Date: fd--�Sc)J
Information provided on this form is public information and may be made available to other applicants, members of the press, or the general public. 327
Cl y · SOLVANG, CALI - HNIA
Bo rds, 01111 issions & Commille s Application
M -ASURE U Cl 12 NS' OV RSIGHT C MMI T
/-\dministration
1644 Oal< Street, Solvang, CA 93463
H (005) 688-5 75 x206
Email. wend_yl)@_g!Y.olsolv a.Qg__fQ!!I_
the AdrninistraJion office by 6:00 p. m. yvednesdav, December 6, 2023 Are you a resident w·
Residence Address
---No
Home Phone: ____________ _
E-mail: Years Lived in Solvang,.:....: ___,;/�2=--•:__ _____ _ Present Occupation'-: __ ..;..)14Ce;;..;n'-'''-'--F"'.-'£.a;:_..;.. _____ Name of Firm-=-: _____________ _ Previous service on any Commission/Board/Council? ✓ Yes Are you available to attend evening meetings?
Are you able to Attend Day Meetings?
---,/ Yes
---✓ Yes
Are you able to attend weekend community meetings or events? Do you own a business within the City of Solvang?
___ No
___ No
✓ Yes
___ Yes
___ No
Earliest Hour? __ _
___ No
_v __ . o
Name and Address of Business -------------�-----------
0 o you presently contract any services or are you otherwise employed by the City? __ Yes ✓ No If so, what is the nature of the contract or employment? ------------------- Profession a I Experience: ,f,_,�t
� c.h,c,/JJ.Aoe;;d e.J«.cA.lu- � ,4£lf d�t»Mt.-�on �ks
Information provided on this form /s pubr, • � ,- or /he press. or lhe general f)Ubl/c. ,c in ormo ion and may he made available lo other applicants, members 328
Educational Background:
u of s Fla and Eckerd College. Post-grad trainings include AMI Primary certification, as well as VitalSmarts Crucial Confrontations training, Wt1ole8ody Focusing Civic Activities & Community Involvement:
Volunteer docent with Nature Track (guiding local schoolchildren on field trips in nature) Poll worker for local elections, Solvang School activities (including SEFF Board) Approximately how many City Council or advisory body meetings have you attended in the last 24 months? Please describe the reasons for attendance or topics of Interest? Have attended a handful by internet, to gain more info, educate myself on issues ond on solutions being pursue( Why are you seeking the appointment to a City Council Advisory Body? Someone suggested that y skills and experience might be useful ...
I hereby certify that the information contained in this r • true and correct to the best of my knowledge.
app 1cat1on and any accompanying documents is
Signature �
Print Name Adelia Kehoe
Date: 4 Dec 2023
329
CITY OF SOLVANG
NOTICE OF ADVISORY BODY RECRUITMENT
MEASURE U CITIZENS' OVERSIGHT COMMITTEE
NOTICE IS HEREBY GIVEN that the City is currently conducting recruitment to fill new positions on the Measure U Citizens' Oversight Committee, which are appointed by, and serve at the pleasure of the Solvang City Council.
To be eligible to serve on any boards, commissions, or committees, appointees must meet qualifications as they may apply.
Qualifications. Each member of the Measure U Citizens' Oversight Committee shall be a resident of the City of Solvang or a business owner within the City of Solvang.
The purpose of the committee is to review the revenue and expenditure of funds from the tax established by Ordinance No. 22-0363 and to help ensure accountability to voters regarding such expenditures.
General duties.
A. The committee shall serve in an advisory capacity to the City Council and shall have no independent authority to expend or direct the expenditure of funds received by the City under Measure U.
B. The committee may conduct hearings, review reports, request funding from the City Council for independent audits of Measure U funds, receive presentations, provide comments, make findings and recommendations and issue reports to the City Council related to implementation of Measure U and the expenditure of funds received under Measure U.
C. City staff shall provide administrative and technical support to the committee.
Committee membership and administration.
A. Membership. The Measure U citizens' oversight committee shall be comprised of five (5) members.
B. Appointment. Each city council member shall appoint one (1) member of the Measure U citizens' oversight committee.
C. Term. Committee member terms shall be two (2) years. To ensure committee membership turnover is staggered, the terms of the first committee members appointed by the Mayor and the Mayor pro-tern shall be for one (1) year. All subsequent committee members appointed by the Mayor and the Mayor pro-tern shall be for the regular term of two (2) years, or, if filling a vacancy, the remainder of the term.
D. Vacancies. Vacancies shall be filled by appointment by the City Council member making the original appointment for the unexpired portion of the term.
E. Removal. A member who is absent for three (3) consecutive meetings shall be removed without further action of the City Council and the vacancy filled as set forth in subsection D above.
F. Compensation and Expenses. Members shall serve with no compensation, but they shall be reimbursed for their reasonable expenses as allowed by applicable law, provided the City Council allocates sufficient funding for such expenses.
G. Officers. Officers of the committee shall include the Chair and Vice-chair. Each year, officers shall be elected by a majority vote of the members present at the first regular meeting of the committee in a calendar year.
The Vice-chair shall serve as the Chair, pro tempore, when the Chair is absent.
H. Meetings. The inaugural meeting of the committee shall be at a time and place set by City Council.
Thereafter, the committee shall meet twice annually at a time and place deemed appropriate by the majoritYJeQ the committee. At the discretion of the Chair, meetings may be rescheduled or cancelled. Meetings shall be called, noticed and conducted in compliance with the Ralph M. Brown Act as amended (Government Code section 54950 et seq.).
I. Voting. Only appointed members who are present at a committee meeting may make a motion, second a motion or vote upon a motion under consideration by the committee. A motion shall pass if approved by a simple majority of the members present and voting at the meeting unless otherwise required. A quorum shall consist of a simple majority of committee members (three (3) of five (5) members). The committee may only take action on items if a quorum of appointed members is present, except that if a quorum is not present, the present members may vote to adjourn the meeting.
J. Amendment of Duties. A majority of the City Council must approve any amendments to the committee's duties set forth herein. The committee may, by majority vote of the committee, recommend amendments to the committee's duties for consideration by the city council. 331
BLUE FOLDER ITEM
Blue folder items are additional back up material to administrative reports and/or public comments received after the printing and distribution of the agenda packet for receive and file.
Item 6.c
City Council Meeting
January 22, 2024
Discussion and possible action to appoint members to the Measure U Citizens Oversight Committee Additional Application received.
SOLVANC·
Administration
1644 Oak Street, Solvang, CA 93463
PH (805) 688-5575 x206
Email: wsndvb@citvofs:,lvanq.corn
Interested parties must submit application to the Administration office by >O< p.m========== Jamie Baker
Applicant's Name_==---------------=-==-----=-
Are you a resident within the City of Solvang
Residence Address
/
X
--Yes
Cell Phone__________ : �---- Home Phone:�-----------
14 E-mail:= _______________ Years Lived in Solvang,�:=--------- owner Space VR
Present Occupation-=: -------===_Name of Firm_:_
V
---= ........ �---'---'--.-�-
X
Previous service on any Commission/Board/Council? ___ No If Yes, which C/B/C?
X
Are you available to attend evening meetings?
Are you able to Attend Day Meetings?
___ Yes Earliest Hour?
X
--- Yes
Are you able to attend weekend community meetings or events? Do you own a business within the City of Solvang?
Space VR
___ No
X
X
Yes
__ Yes
---
___ No
Name and Address of Business__________ . _______________ _ X
Do you presently contract any services or are you otherwise employed by the City? __ Yes __ No If so, what is the nature of the contract or employment? ________________ _ Professional Experience:
6 year business owner in Solvang
12 years Director of Development for several children mental health and foster care agencies including the largest one in Los Angeles County.
3 years allocating prop 12 and prop A funds for both the City and County Parks and Recreation Departments of Los Angeles
Information provided on this form is public information and may be made available to other applicants, members of the press, or the general public.
Educational Background:
AA. Taught at college level
Civic Activities & Community Involvement:
As a business owner, I try to involve our mission with as many causes as I can.
As a parent I volunteer-for the activities my kids are passionate about.
Approximately how many City Council or advisory body meetings have you attended in the last 24 months? Please describe the reasons for attendance or topics of Interest? Not for any particular reason or interest.
Why are you seeking the appointment to a City Council Advisory Body? A few years ago I ran for City Council. At the same time, I found out I had some health issues that needed to take priority. I now feel that I can devote enough time to issues that affect our city.
I hereby certify that the information contained in this application and any accompanying documents is true and corre�
.,,to the br, of my knowledge.
Signature ti'"- /I '7 � . Date: t-Z;>-;Zb:?�4,
Print Name Jv ,�!fR_ DcJ k�r
Information provided on this form is public information and may be made available to other applicants, members of the press, or the general public.
CITY COUNCIL STAFF REPORT
AGENDA ITEM 6.d
SOLVANG
SUBJECT:
Meeting Date: January 22, 2024
Discussion and Possible direction to Staff regarding Utility Director salary update.
PREPARED BY: Wendy Berry, Director of Administrative Services DISCUSSION:
The Utility Director Position has been vacant since July of 2023. The City posted the job on the City website, Government jobs and hired Ralph Anderson & Associates for recruitment. The City received several non-qualified applicants and Ralph Anderson received one applicant in the second round of recruiting. Staff interviewed that candidate, and he requested a salary of $165,000 which is higher than the City's maximum range. Currently, the salary range 144 for the Utility Director is $117,665.64 - $147,097.56 annually. The City's benefit package is comparable to other agencies but the hourly wage for this position tends to be on the lower range. The City has contracted with Cannon engineering to have the prior Public Works Director assist the City approximately 8 hours a week.
Back in June/July of 2022, staff sent out an RFP for a compensation study to include updated job descriptions. The contract was awarded and the study was supposed to be completed by March, however it took longer and the quality of work completed was not adequate.
Salary range 144 includes all other department head positions. If Council increased the salary range for the Utility Director, the other positions would also be affected.
Staff is looking for direction from City Council on how to proceed to fill this vacancy.
ALTERNATIVES:
A. Direct Staff to send out a RFP for a Class and Compensation study for all positions.
B. Increase Utility Director position salary range
FISCAL IMPACT:
A Budget adjustment will be required for the costs associated with a Comp/Class Study and with increasing the Utility Director salary range.
ATTACHMENTS:
A. Utility Director job description
B. Unrepresented Salary Range
332
Attachment A
City of Solvang
Job Description
UTILITY DIRECTOR
Class Title
Utility Director
Under general direction of the City Manager, plans, organizes, and directs the Department of Utilities which includes operation and maintenance of the water, Wastewater Treatment Plant and sewer collection system, solid waste utilities, and groundwater sustainability management as part of the Ground Water Sustainability Agency .. This position supervises professional, technical and support staff and is classified as an "at-will" position.
To provide the highest quality service in the most efficient, cost-effective and courteous manner possible. And, deliver high quality water to your faucet, diversify sustainable water sources, treat wastewater and maintain environmentally responsible solid waste program ..
ESSENTIAL DUTIES/RESPONSIBILITIES:
These duties are a representative example; position assignments may vary depending on the business needs of the department and organization. This position:
• Directs the work of the Department of Utilities to provide water, wastewater, groundwater sustainability efforts, and solid waste services.
• Directs the selection, placement, training and supervision of other employees; reviews and evaluates performance and recommends personnel action.
• Develops and administers the department's annual budget and controls expenditures. • Plans, develops, and recommends long-range capital programs and coordinates project approval, funding, and implementation with City Council, commissions, staff, local groups, and regulatory agencies.
• Evaluates the need for, and develops plans and schedules for, long range water needs. • Negotiates and oversees water sale agreements; compiles estimates, contract provisions and specifications.
• Solicits, coordinates, and reviews work of consulting firms engaged in varied operational studies.
333
• Confers with the City Manager and various public groups on proposed projects and improvements and with subordinates on the construction, repair, and maintenance of utility facilities.
• Prepares and reviews reports to regulatory and funding agencies, monitors conformance of varied program services functions to extensive local, state, and federal guidelines. • Makes oral presentations before City Council, boards, commissions, and community groups. • Scope of assigned area will depend on departmental structure and is at the discretion of the City Manager.
• Upholds the values of the organization and has strong customer service orientation. • Performs other related projects and duties as assigned.
QUALIFICATIONS/EXPERIENCE:
Ideally, Bachelor's Degree in engineering, natural science, environmental science, or related field and five (5) years responsible experience in utilities systems administration, including at least two (2) years in a management supervisory capacity; and/or equivalent combination of education and experience sufficient to successfully perform the essential duties of the job such as those listed above.
Direct working experience in at least one of the four major areas ofresponsibilities; water, groundwater sustainability, wastewater, and solid waste.
Superior management skills, including experience monitoring contractual performance and overseeing various agreements; a history of developing and monitoring complex capital and operating budgets; and a commitment to continuing customer service, teamwork and team building.
Knowledge of pertinent federal, state, and local laws, rules, and regulations applicable to municipal utility operations; organizational and management practices as applied to analysis and evaluation of program, policies and operational needs; principles of financial management and rate setting; and principles of management, training and performance appraisal.
Ability to motivate and lead employees; communicate clearly and concisely, orally and in writing; interact effectively with staff, the public, officials, and representatives of business and other agencies, including joint power agencies.
• Experience in municipal or county government or public utilities is desired. o Methods, techniques, and operations of water and wastewater treatment, distribution, and collection.
334
• Possession of licenses and/or certifications associated with the assignment. • Possession of a valid and appropriate California Driver License. Must possess and maintain a satisfactory driving record and be insurable to operate City vehicles. • Requires completion of a background investigation to the satisfaction of the city.
This is to acknowledge that I have received a copy of this description and understand its contents.
Employee Signature Date
335
DocuSign Envelope ID: CCC41111-82FA-42D8-A2C6-73D2824DE8D2
27.00 39.07
41.03 42.08
43.10 Mana ement Anal st 44.19
Human Resources Mana er 44.19
45.30 46.42
47.62 48.81
50.04 51.26
Park & Rec Director 51.26
52.49 Plannin Mana er 53.84
Cit Clerk 53.84
55.15 Administrative Services Director 56.57
Plannin Director 56.57
Public Works Director/Cit En ineer 56.57
Utilities Director 56.57
57.96 65.38
City Manager
D.lUllUll .n.
UNREPRESENTED EMPLOYEES
Fiscal Year 2023-2024
Effective 08-01-2023
$ 28.69 $ 32.05
$ 41.55 $ 43.97 $ 46.40
$ 43.61 $ 46.17 $ 48.74
$ 44.69 $ 47.33 $ 49.99
$ 45.80 $ 48.53 $ 51.22
$ 46.97 $ 49.72 $ 52.48
$ 46.97 $ 49.72 $ 52.48
$ 48.16 $ 50.96 $ 53.78
$ 49.36 $ 52.27 $ 55.13
$ 50.59 $ 53.56 $ 56.53
$ 51.82 $ 54.87 $ 57.94
$ 53.14 $ 56.25 $ 59.38
$ 54.44 $ 57.64 $ 60.85
$ 54.44 $ 57.64 $ 60.85
$ 55.78 $ 59.11 $ 62.34
$ 57.18 $ 60.56 $ 63.92
$ 57.18 $ 60.56 $ 63.92
$ 58.63 $ 62.07 $ 65.54
$ 60.10 $ 63.64 $ 67.18
$ 60.10 $ 63.64 $ 67.18
$ 60.10 $ 63.64 $ 67.18
$ 60.10 $ 63.64 $ 67.18
$ 61.58 $ 65.23 $ 68.86
$ 69.45 $ 73.54 $ 77.63
$ $ $
Employees arc paid based on hourly rate schodulc. Figures may vary slightly due to rounding.
Attachment B
4,680.00 $ 4,972.93 $ 5,260.67 $ 5,555.33 $ 5,843.07
6,772.13 $ 7,202.00 $ 7,621.47 $ 8,042.67 $ 8,469.07
7,111.87 $ 7,559.07 $ 8,002.80 $ 8,448.27 $ 8,890.27
7,293.87 $ 7,746.27 $ 8,203.87 $ 8,664.93 $ 9,115.60
7,470.67 $ 7,938.67 $ 8,411.87 $ 8,878.13 $ 9,342.67
7,659.60 $ 8,141.47 $ 8,618.13 $ 9,096.53 $ 9,573.20
7,659.60 $ 8,141.47 $ 8,618.13 $ 9,096.53 $ 9,573.20
7,852.00 $ 8,347.73 $ 8,833.07 $ 9,321.87 $ 9,808.93
8,046.13 $ 8,555.73 $ 9,060.13 $ 9,555.87 $10,063.73
8,254.13 $ 8,768.93 $ 9,283.73 $ 9,798.53 $10,313.33
8,460.40 $ 8,982.13 $ 9,510.80 $10,042.93 $10,571.60
8,673.60 $ 9,210.93 $ 9,750.00 $10,292.53 $10,836.80
8,885.07 $ 9,436.27 $ 9,990.93 $10,547.33 $11,096.80
8,885.07 $ 9,436.27 $ 9,990.93 $10,547.33 $11,096.80
9,098.27 $ 9,668.53 $10,245.73 $10,805.60 $11,377.60
9,332.27 $ 9,911.20 $10,497.07 $11,079.47 $11,663.60
9,332.27 $ 9,911.20 $10,497.07 $11,079.47 $11,663.60
9,559.33 $10,162.53 $10,758.80 $11,360.27 $11,954.80
9,805.47 $10,417.33 $11,030.93 $11,644.53 $12,258.13
9,805.47 $10,417.33 $11,030.93 $11,644.53 $12,258.13
9,805.47 $10,417.33 $11,030.93 $11,644.53 $12,258.13
9,805.47 $10,417.33 $11,030.93 $11,644.53 $12,258.13
$10,673.87 $11,306.53 $11,935.73 $12,568.40
$12,038.00 $12,746.93 $13,455.87 $14,168.27
$ $ $ $15,834.00
336
CITY COUNCIL STAFF REPORT
AGENDA ITEM 6.e
SOLVANG
SUBJECT:
Meeting Date: January 22, 2024
Discussion and possible direction to staff regarding City priorities on State Route 246, Mission Drive
PREPARED BY: Rodger A. Olds, Director of Public Works/City Engineer DISCUSSION:
Mission Drive, also known as State Route 246 is the primary route to and through the City of Solvang.
This route also bisects the City's downtown area. This route is owned, operated, and maintained by the State of California Department of Transportation (Caltrans). The City does have maintenance responsibility for the pedestrian facilities and street trees along the route.
Being the City's only primary arterial roadway, Mission Drive conveys more vehicle trips than any other roadway within the City. As such, traffic, congestion and operations on this roadway greatly impact the rest of the City's roadway network.
Staff is working to set up meetings with the various Caltrans divisions to go over ongoing City concerns in regard to Mission Drive. Prior to this, Staff is seeking Council direction on various aspects of Mission Drive in order to focus on the desires of Council.
After the initial meetings with Caltrans Staff will come back to Council to report the findings and path forward for the various projects and seek Council direction and potential funding of the next steps. This initial discussion with Caltrans is essential. There is no sense in spending time and money studying things, getting Council's direction, and engaging the local business and property owners on potential solutions, and then getting a denial from one of the Caltrans Divisions that were not brought into the discussion early.
Below is a list of potential issues for discussion:
1. Intersection improvements at Skytt Mesa Road and Mission Drive (SR246). - Staff and Mayor lnfanti had a good conversation last year with Caltrans staff and had discussed some interim solutions prior to a full intersection control (Signal/Roundabout) which understandably would not happen until further development on the south side of Mission Drive. We left the meeting with the understanding that Caltrans staff would begin an analysis of this issue and pursue some interim solutions. Recent discussions with Caltrans revealed that Caltrans staff is waiting on the City to study, design, fund and install the interim improvements through the Caltrans encroachment permit process.
2. Intersection Improvements at Alamo Pintado and Mission - This intersection routinely backs up in several directions. It is ripe for some improvements, which may include improvements to the four-way stop at Old Mission. Increased traffic at these two intersections may eventually justify a coordinated dual signal system at the intersections of Alamo Pintado and Mission Drive and Alamo Pintado and Old Mission. This also plays into the upcoming reconstruction of the Alamo Pintado Creek Bridge. There was an Intersection Control Evaluation {ICE Study) completed several years ago that reviewed the possibility of a Roundabout at Mission Drive and Alamo Pintado. This study would need to be revisited along with any discussion of the modification of the intersection. 337
As we will discuss below, the bridge construction is on track for construction in 27/28, but it would really benefit both the City and Caltrans to include any substantive intersection improvements into the bridge design project, which is currently ongoing.
3. Alamo Pintado Creek Bridge Design - The City has been working directly with the Design project manager. The project team is currently studying the hydraulics and environmental impacts of the bridge widening. The Construction is still slated for 2027/28. The $15 Million project is funded through the SHOP program with a $600,000 contribution from the City of Solvang through the Measure A program.
4. Traffic Flows or lack thereof on Mission Drive (SR246) - This is an issue that feeds into others throughout town. It is a multifaceted problem, and staff will be meeting with Caltrans before initiating a proper study to start the ball rolling on any real solution.
We neither anticipate nor want traffic flowing at 45 MPH through town, but a steady flow of queued vehicles averaging 15 MPH would be nice. A project here would have multiple phases and obviously would need participation between the City of Solvang and Caltrans for both funding and long-term maintenance. Some of the items I think we need to consider are:
a. Pedestrian Controls - This may include the elimination of two of the four uncontrolled ped crossings and installing two ped signals interconnected and coordinated with the signal system for the three existing downtown signals (Fifth, Atterdag, and Alisal) This would likely improve flow through town. Initial high-level discussion with Caltrans have been met with the standard answer of "no pedestrian restrictions". We will need to study this and show that this is a more regional concern that includes some safety elements. b. Intersection Improvements
i. Left-turn phasing at Fifth and Mission. This may be initially done with minimal change to the existing signal poles and a five-head signal with some reprogramming. It is unknown at this time whether any new signal poles would be necessary in order to properly implement signal improvements. It is also unclear as to whether Caltrans would allow this improvement as it could cause additional delay on Mission Drive. Staff can work with Caltrans to begin the scoping of this project.
ii. More Left-turn storage at Atterdag. This may be necessary, but the need will be revealed with traffic counts. Longer left turn storage will likely eliminate some onstreet parking. iii. Alisal Intersection Improvements. This could take a number of forms and improving the flow through downtown may solve some of them. The westbound left-turn is typically inadequate during peak times, however installing a longer pocket or even a median may not have a beneficial impact. Dual left-turn lanes are not feasible at this time since the second lane on Alisal Road receiving the second left-turn lane only exists for half a block.
c. Scramble Crosswalks - This is an item that has been discussed previously. This will have more operational adverse impacts than benefits, but we will be studying it at a minimum and want to discuss it with Caltrans Staff.
d. Other potential Improvements - Other improvements could be limiting driveways or other city roadways in the downtown to right in/out only or the elimination of additional parking (angled parking) on Mission Drive.
Staff is open to other ideas that could potentially improve the flow of traffic on Mission Drive or the intersection streets. All things should be considered, reasonably analyzed for potential benefit, and brought to Caltrans for feedback and recommendations on how to process the desired improvement. The City will likely be responsible for obtaining 338
funding for any proposed improvements either through Measure A, Measure U, Grant funding, or through the General Fund.
5. Joint Maintenance Agreement - Staff has been unable to locate the existing agreement that establishes the City as the maintenance organization for sidewalk and tree maintenance. It is likely very old and in need of updating. The City is continuing to discuss this with Caltrans in order to go over the City's and Caltrans' obligations.
Any existing agreement will certainly need to be updated, particularly if we start talking pedestrian signals and other City improvements to the downtown areas, which could eventually include some fancy crosswalk details like pavers or stamped concrete, bulb outs to reduce ped crossing distance, lights strung across Mission Drive near the park or other such amenities.
ALTERNATIVES:
Provide staff with direction as to what priorities to focus on with ongoing meeting with Caltrans.
FISCAL IMPACT:
There is no identified Fiscal impact at this time.
339
CITY COUNCIL STAFF REPORT
AGENDA ITEM 6.f
SOLVANG
SUBJECT:
Meeting Date: January 22, 2024
Discussion and Possible Action to Provide Direction to Staff to Refocus WWTP Design Efforts Regarding the Production of Reclaimed Water PREPARED BY: Randy Murphy, City Manager
DISCUSSION:
As your Council is aware, staff was recently informed that the City no longer qualifies for potential USDA grant to upgrade its sixty-plus-year-old Wastewater Treatment Plant (WWTP). Since one of the main purposes of the grant was for the plant to produce reclaimed water, that portion of the project is no longer required. As can be seen in the chart below, the potential savings would be substantial (almost $5,000,000, or over 25% of the total project).
Item I Project WITH I Project WITHOUT
Reclaimed Water Reclaimed Water
Civil $980,400 $980,400
Secondary Clarifiers $2,263,200 $2,263,200
Cloth Filters $906,000 $0
Chlorine Contact Basin $1,208,400 $0
Sludge Handling Facilities $1,508,400 $1,508,400
Electrical Control Building $1,056,000 $1,056,000
Subtotal $7,922,400 $5,808,000
Electrical, Instrumentation, & Controls $1,584,000 $1,162,000 Subtotal $9,506,400 $6,970,000
Total General Conditions $951,000 $697,000
Total Direct Cost $10,457,400 $7,667,000
Contingency $1,569,000 $1,151,000
Subtotal $12,026,400 $8,818,000
Contractor Overhead & Profit $2,406,000 $1,764,000
Subtotal $14,432,400 $10,582,000
Sales Tax $563,000 $413,000
Total Estimated Construction Cost $14,995,400 $10,995,000 Engineering, Legal, Administration $1,500,000 $1,100,000 Owner's Reserve for Change Orders $1,500,000 $1,100,000 Total Project Cost $17,995,400 $13,195,000
Additionally, there are no identified customers for the reclaimed water. Since we are nearing the point in design where a change of this magnitude would cause a budgetary impact, staff requests Council direction on whether or not to include the reclaimed water portion of the WWTP upgrade 340
ALTERNATIVES:
With the understanding that these costs do not include storage and distribution infrastructure expenses for the reclaimed water (which will be significant), Council may choose to continue forward with the original plan. Or they may opt to alter course and add this component at a later date when customers have been identified and grants become available.
FISCAL IMPACT:
Discussed above.
ATTACHMENTS:
None
341
CITY COUNCIL STAFF REPORT
AGENDA ITEM 6.g
SOLVANG
SUBJECT:
Meeting Date: January 22, 2024
Discussion and possible action to approve revised Human Services Grant Funding Policy
PREPARED BY: Wendy Berry, Administrative Services Director DISCUSSION:
The City of Solvang recognizes the value of Non-profit organizations' contributions to our community, through special programs, or holding special events within the City, and has maintained a Grant Funding Policy whereby the City Council reviews grant funding requests each year during the annual budget development process. The Grant Funding policy focuses on senior services, Veterans services and minors with disabilities and provides criteria to apply, with an application with guidelines for grant funding considerations. Grant funding is based on availability of funds. The application process is typically from February 1
st through March 31 each year. Staff is recommending City Council approve the grant funding policy and application changes which would not require City Council approval each year and includes the new requirement for the campaign contribution disclosure.
City Council would still review the grant funding applications during the budget process.
ALTERNATIVES:
City Council could elect not to continue with the grant funding program or City Council could adopt a grant funding cap.
FISCAL IMPACT:
Determined during the budget approvement process based on applications submitted.
ATTACHMENTS:
A. Grant Funding Policy and Application.
342
CITY OF SOLVANG
HUMAN SERVICES GRANT FUNDING
POLICIES and PROCEDURES
The Solvang City Council recognizes the importance of human services and programs and organizations that serve community residents. As part of the annual budget process and financial plan development, the City Council may consider appropriation of such funds as it deems prudent and reasonable to award grants to non-profit community service organizations. The grant funding process will occur every February 1
st through March 31 st of each year. Grant funding is based on available funds.
Policy
A. Non-Profit / Not for Profit. Tax-exemption is the result of a nonprofit organization being recognized by the IRS as being organized for any purpose allowable under 501 (c)(3)- 501 (c)(27).
B. Grants Shall Not be available to organizations who intend to directly or indirectly act as a conduit to provide grant funding to other organizations.
C. The City will prioritize funding for Solvang citizen services, senior citizen services, Veterans, youth and minors with disabilities.
D. City grant funds Shall Not be used by the agency for administrative/overhead types of costs.
E. Applicants must be in good standing with the IRS, FTB and current with their registration with the Attorney General / Department of Justice.
F. Applicants agree to sign the City's Standard Grant Agreement, abide by all conditions and requirements, and shall present a report of a detailed accounting of how the funds were spent. _G_. __ Applicants will provide three years of financial statements, if available.
G-cH. Campaign Contribution Disclosure: Pursuant to Government Code Section 84308, any party to a City proceeding (which includes, but is not limited to, all contracts with the City, other than competitively bid, labor, or personal employment contracts) must disclose on the record any campaign contributions made to a member of the City Council or other elected or appointed officer of the City, any candidate for elected office of the City, or any candidate for elective office of any other agency who is also an elected or appointed officer of the City in excess of $250 in the past 12 months. This disclosure requirement includes contributions by the party's agent, such as a consultant. and aggregated contributions from persons or entities related to the party.
Consultant is required to fill out and provide the attached Exhibit C 'Applicant/Interested Party Campaign Contribution Disclosure Form' with submission of this Agreement and to update this form after each contribution and no later than the beginning of any associated proceeding.
Procedures
A. The application period for Organizations wishing to apply for grant funds will be opened on February 1 .�of current year and deadline to apply will be March 31 .�of current year.
Gi
ant Funding Policy CC 202;?4-0&Ql-0&2.2.
i Formatted: Superscript
i Formatted: Superscript
Formatted: Indent: Left: 0.5'', No bullets or numbering 343
B. In addition to the completed Application/\pplicants must provide completed grant application, Applicants are to provide the last three most recent 990's filed with the IRS and also provide the three most current years of financials, if available7 � Q.,_Staff will review applications for completeness and qualifications based upon grant program parameters and will provide the Council with analysis whether the grant applications qualify under this program. Completed applications may be subsidized with additional information siM-lall
regarding the Organization and their programs. Email applications to [email protected] or deliver to City Hall (1644 Oak Street, Solvang, CA 93463).
B. ataff 'Nill review applications for completeness and qualifications based upon grant program parameters and will provide the Council 'Nith analysis whether the grant application qualify under the program.
G-cQ_,__Copies of all funding applications received will be provided to all City Council members and will be considered by Council as part of the budget adoption hearing and will be a public record. �L_A representative from the requesting organization must be available for questions from City staff and/or City Council related to their grant funding application and must attend and present at the annual City budget hearing. Following adoption of the annual City budget, execution of City standard Grant Funding Contract with the City along with submittal of proper insurance certificates including hold harmless endorsement and waiver of subrogation, the City will disburse approved funds within 30 days.
Gi
ant Funding Policy CC 202;?4-0&Ql-0&2.2.
( Formatted: Font: Not Bold
Formatted: Indent: Left: 0.5'', No bullets or numbering Formatted: List Paragraph, Numbered + Level: 1 +
Numbering Style: A, B, C, ... + Start at: 1 + Alignment:
Left + Aligned at: 0.25" + Indent at: 0.5''
344
CITY OF SOLVANG
HUMAN SERVICES GRANT FUNDING
APPLICATION
1. Legal Organization/Agency Name and dba if applicable:
2. Total Funding Request
3. Contact Person Name, Title within the Organization, Email and phone number:
4. Mailing Address:
5. Physical Address:
6. Organization's purpose? Goals and objectives?
7. Program of the funding request? Provide a detailed accounting of what specific program the granted funds will be used for?
8. How many Solvang residents will be impacted by the proposed use of the grant funds?
9. What is the organization's total budget?
10. What are the sources of revenue for your organization? How are you funded? Gi
ant Funding Policy CC 202;?4-0&Ql-0&2.2.
345
Reference #:
(File or Contract#)
Applicant/Interested Party Campaign Contribution Disclosure Form • Land use, entitlements, licenses, permits, franchises, contracts ( excluding labor and competitively bid contracts) Applicant/Interested Party Information
Applicant
Representative/
Agent
Business
Address
Address Line 2
City
State
Name and subject matter of applicant's proceeding
Phone
Email
Website
Fax
Zip Cod
Contribution Disclosure (Government Code section 84308) e r
Please list all contributions in excess of$250 (either as a single payment or in aggregate) made within the past 12 months to officers of the agency involved in the above-mentioned proceeding by any parties (applicants) or their agents or representatives, including corporations, limited liability companies (LLCs), or other business entities and principals thereof, that are affiliated with the above-referenced proceeding. You may attach attach additional pages as necessary to list contributions made to involved agency officers and provide additional information about the contributor's relationship with the recipient.
Contributor Name --
Date of Contribution Recipient Officer/ Contribution Amount Refunded: Yes or No; Date of Refund Candidate
Sign and Date
This form must be updated after each contribution, and no less than 45 days before any agency consideration regarding the above-referenced application. Completion of this form does not waive or in any way impact a party's obligation to disclose such contributions over $250 on the record of the proceeding pursuant to Government Code section 84308(e).
I declare under penalty of perjury that the information which has been included in this Disclosure Form is true and correct.
Signed Date
346
I
CITY COUNCIL STAFF REPORT
AGENDA ITEM 6.h
SOLVANG
SUBJECT:
Meeting Date: January 22, 2024
Discussion and Possible Direction to Staff regarding Pickleball Courts in Hans Christian Andersen Park
PREPARED BY: Jenny Mcclurg, Parks and Recreation Director DISCUSSION:
At the October 23, 2023 City Council meeting, staff was directed to engage a survey company to survey various sites for pickleball courts. Staff identified 3 areas for potential pickleball courts: 1 ).
Current location of pickleball courts at Hans Christian Andersen Park (potential 3 courts); 2). Hans Christian Andersen Park at Area B reservable site across the creek from the skate park (potential 4 courts) and 3). Sunny Fields Park between the sand volleyball courts and Area A reservable site that would run parallel to Alamo Pintado Road (potential 4-7 courts).
In evaluating/assessing current and future pickleball court locations, staff recommends updating the Recreation Master Plan before proceeding with any major capital expenses. The last Recreation Master Plan was done in 2004 and the Hans Christian Andersen Park Master Plan was last done in 2006 before Sunny Fields Park. A Master Plan would assess all existing facilities and parks, address unmet recreation needs, identify a range of recreation improvements, and foster coordination and cooperation between the County, surrounding cities, and other potential agencies such as non-profit and private recreation service providers. Best potential locations for pickleball courts would be addressed in this Master Plan. Staff intends to address an updated Master Plan and budget for this expense in the FY23/24 budget.
Staff has determined that surveying those potential areas at this time was unnecessary for a general layout and not the best way to spend public funds. Rather, once a location is selected as part of the Recreation Master Plan, we can utilize those funds to go toward the survey once needed so there is not wasteful spending.
An important update worth mentioning is that staff was able to secure an amendment to the contract for Prop 68 to extend the grant performance period from June 30, 2024 to June 30, 2028 to add Ill. Special Provisions, Economic Sanctions. Part of the grant funds were allocated to go to the pickleball courts.
With the amendment, there is no need to rush this project and it can be done with full thought of the recreation needs for the future.
In the meantime, staff has analyzed options for temporary pickleball courts and is now seeking direction from Council. The following three options will fulfill the current demand of pickleball needs and will address the potential need to close the current existing courts (if safety hazards warrant the closure) until a new pickleball court facility can be constructed. None of the below options would remove tennis courts.
Option 1:
Lining one or more tennis courts with pickleball lines while keeping the tennis lines and nets set as seen in Attachment A. Although there would be a two-inch difference in the regulation height of the net while playing pickleball, any disadvantage created by that difference would be shared by all players.
This would be one pickleball court overlaid per one tennis court. These would be multi-use courts for both pickleball and tennis. The cost is roughly $1750 per court. 347
Option 2:
Lining one tennis court with two pickleball courts as seen in Attachment A and purchasing two portable pickleball nets on wheels. The existing tennis lines and net would stay and act as a barrier between the two pickleball courts. When the pickleball courts are not in use, they are wheeled and stored to the side and the court goes back to the original tennis court. Cost is roughly $5000 for installing two pickleball court lines on one existing tennis court surface and purchasing two portable pickleball nets.
Option 3:
Lining one tennis court with four pickleball courts (four pickleball courts per one tennis court) as seen in Attachment A and purchasing four portable pickleball nets on wheels. The existing tennis lines and net would stay and when all four pickleball courts are not in use, they are wheeled and stored to the side and the court goes back to the original tennis courts. The cost is roughly $9200 for installing four pickleball court lines on existing tennis court surfaces and four portable pickleball nets.
ALTERNATIVES:
The Council can direct staff to pursue either of the three options presented or pursue other options.
FISCAL IMPACT:
Costs range from $1750 to $9200 that can be used from the Prop 68 grant funding. Staff intends to work within the currently approved budget.
ATTACHMENTS:
A - Option 1-3 Diagram
348
Option 1
One Pickleball Court
(use existing tennis net)
Option 2
Two Pickleball Courts
Attachment A
Option 3
Four Pickleball Courts
349
SOLVANG
SUBJECT:
PREPARED BY:
DISCUSSION:
CITY COUNCIL STAFF REPORT
AGENDA ITEM 6.i
Meeting Date: January 22, 2024
Discussion and Possible Action to Direct Staff to Investigate Los Olivos CSD Request to Connect to Solvang's WWTP for Treatment of Their Wastewater
Randy Murphy, City Manager
Staff recently received a request from Los Olivos Community Services District (LOCSD) to rekindle the discussion for them to connect to our wastewater treatment plan (WWTP) in order to treat their sewage (see attached).
Initial discussions with Carollo Engineers have determined that Solvang's WWTP has plenty of capacity for LOCSD's effluent. Additional analyses are needed to determine if the constituents in their wastewater will create any complications to compliance with our recently approved Waste Discharge Requirements (WDRs)
Staff understands that there may be some level of public concern with the probable alignment of the connection to our wastewater lines, as it might be perceived as encouraging development in that area.
However, that can be mitigated by limiting the amount of wastewater they would be allowed to produce.
Another consideration is that LOCSD's potential inclusion would allow them to contribute their proportional costs associated with the pending WWTP upgrade.
Before proceeding too much further, staff seeks Council direction on whether or not to even pursue the matter.
ALTERNATIVES:
None.
FISCAL IMPACT:
Unknown at this time.
ATTACHMENTS:
Letter from LOCSD
350
Thomas Fayram, Director
Julie Kennedy, Director
Lisa Palmer, Director
Greg Parks. Director
Nina Stormo, Director
Guy Savage, General Manager
Solvang City Hal
Honorable Mayor Mark lnfanti
Solvang.
1644 Oak Street
CA 93463
PO Box 345, Los Olivos Ca 93441
Telephone (805) 500-4098
[email protected]
www .losolivoscsd.com
January 10. 2024
SUBJECT:
Solvang's wastewater tJeatment infrastructure
Los Ohos Community Services Disbict interest in COln""'ledion to the City of Honorable Mayor lnfanti and City Council.
The City of Solvang. through a letter dated September 19. 2018 (attached). asked the Los Olivos Community Services District (LOCSD) if would be interested in discussing the possibility of purchasing treatment capacity at the Solvang Wastewater Treabnent Plant (WWTP). The LOCSD is interested in such discussions.
Background:
When the 2018 letter was written, the City of Solvang was exploring the upgrade and expansion of ils WWTP. The City was
mllon galons per day (MGD)
considering three alternatives which Mdd continue the City's 1.5 wastewater treatment capacity or potentially expand it up to 2.0 MGD.
At. the tme of yow letter. the LOCSD was still in ils early formation having only been approved by a vole earier in 2018. Consequently. the LOCSD was not in a position to fully understand and
pun:hase
evaluate the ramifications of connection to your wastewater treabnent infrastructure and the of plant capacity.
Since its inceptioo. the LOCSD has been diligently pursuing wastewater treatment approaches that could result in effective treabnent of wastewater that resulted in the region being designated performing
a Special Problems Area in 197 4 due to high nitrates in our groundwater. While simultaneously related studies on the oos1s and approaches to wastewater ooflection. treabnent. concentrations.
and disposal, the LOCSD has been seeking to better understand the levels of nitrate Engineering study-Collection, Treatment, and Disposal of Wastewater In 2022. the LOCSD received a set of early design documents and costs for the construction of a traditional gravity-fed oollection system to a Membrane Bioreactor (MBR) packaged treatment plant. The engineering documents and related cost estimates can be found at htf.ps://www.losolivoscsd.com/technical-studies-and-reports Agenda Packet
estimates for various disposal options. The
In late 2022. the LOCSD received technical documentation that oompared and provided cost alternatives analysis can be found at
https://www .losolivoscsd.com/files/38814b37 d/Effluent+Disposal+Altematives+ Evaluation+v4+ 2022.12.14 .pdf communily as it relates to 1he development of tn:ab,N:lll approaches. The top two priorities of In early 2023. the LOSCO held a communily WOl1'shop to heller lhtets1ald the priorities of 1he oommissiOlaed
pa1icipan1s were capital (conslruction) and � costs. In 2023. the LOCSD ellklenl mlledion and
two separate studies regardii19 trade-offs between (1) 1radilional gravity fed and wnenlly
(2) l'.Hibaized aid dislrlJuted th:atinent approaches. The LOCSD is 'IIIIOIDl!J wilh an engineering firm that is developing a ,iytJrid" approach to oolection and trealmenl The aagineering effort is expected to be completed in early 2024 and wil include cost estin.ales for a system that will rely heavily on effluent collection. Combined, 1he approaches and costs for a system
e.agineering designs wil provide 1he community wilh the opportunity to compare developed,
technical
built. and managed by 1he LOCSD.
As part of its 2022
Exismg flows for 1he
engineemg
erue
efforts the LOCSD confirmed average daily wastewater-flows.
LOCSD were calculated at 96,400 gallons per day (Gm). Awrage daily flows for a proposed 20-,ea- buidout design was calculated at 120.300 GPO. Detais of the flows and calculations can be found at
https
Understanding Nilral.e Lewis in Local
:/fwww.losolivoscsd.com/filesJf0808d63d/Basis+of+Design+01.07 .2022.pdf Groundwater
In late 2022, the LOCSO drilled two groundwater monitoring wells. Testing results from the two wels OOIDiial that
conlaminam levels for
at
hitiates.
least some
The
portiolas
LOCSD
of the
is wnenlly in the process of cHling three adcltio.131
LOCSD are at the alowed maxmum
groundwater fflOlliloring wels within ils boundaries. Conslruction is expected to be completed in throughout the
early 2024. Data from the five wells wift be used to better unders1and the levels of nitrates LOCSO.
llcwing Folwant
The LOCSD is keenly interested in finding the most cost-effective solution to its problem while simultaneously maintaining as much local control as possible. At this time, it is believed that could be a
exploring a potential connection to the City of Solvang's wastewater treatment infrastructure win-win for both the City and the LOCSO. The City could receive additional revenues to help offset costs for wastewater treabnent and related infrastructure without increasil 19 its wastewater
plant size. The LOCSO add explore the costs and baiefits of connecting to an existing 1rea1ment infrastructure and avoid the disruption of siting and building a WWTP in (U' communily.
On behalf of the Board of
opportu
Directors, I look foiward to hearing from you at your eal1iest nity.
Sincerer,
l_y>S Olivos Community Services District
Agenda Packet
Page39of78 352
�1kCityof
· • $@11��tro®
�i-.---�-�/ 7>anish Capital of �m£Tica �---h
September 19, 2018
Mr. Doug Pike
Interim General Manager
Los Olivos Community Services District
P.O. Box 345
Los Olivos, CA 93441
Subject: Proposed Solvang Wastewater Treatment Plant Upgrade/Expansion Dear Doug:
As you may be aware, several situations arose over the last 2 years leading up to the need for the City of Solvang to upgrade and expand our Wastewater Treatment Plant (WWTP). One of those situations was the RWQCB's informal request that the City modify our treatment process and begin de-nitrifying the wastewater. This (and the increase in wastewater strength over the past several years) has resulted in a reduction of our treatment capacity from 1.5 MGD down to 0.9 MGD. Our proposed WWTP Upgrade/Expansion Project seeks to restore the lost capacity, upgrade the Plant, and possibly expand the Plant capacity.
As our first step toward upgrading the Plant, the City hired Pacific Advanced Civil Engineering (PACE) to complete the WWTP Enhanced Treatment Study & Alternatives Analysis. At our City Council's regular meeting of September 10, 2018 staff and PACE presented the findings and recommendations of this Study. The City Council considered the three alternatives of upgrading and expanding the WWTP: 1) Upgrade the existing SBR Plant and restore 1.5 MGD capacity, 2) Add clarifiers, modify Plant and increase Plant capacity to 1. 7 MGD, and 3) Upgrade to MBR Plant and increase Plant capacity to 2.0 MGD. The full Study can be found on the City's website. Alternatives 2 and 3 are being considered further. However, prior to making any final decision, the City Council directed staff to conduct some additional research including contacting the Los Olivos Community Services District (LOCSD) to inquire if you are interested in purchasing treatment capacity in the Solvang WWTP.
This letter is written to make that inquiry. Is the LOCSD interested in discussing the possibility of purchasing treatment capacity in the Solvang WWTP, and if so, how much capacity are you interested in? Your response may influence the City' Council's decision between Alternatives 2 and 3. It is our understanding from the AECOM Los Olivos Engineering Report, dated, November 2, 2016 that the projected Average Day Maximum Month Flow for Los Olivos is somewhere in the range of 118,000 gpd to 180,000 gpd. From this Report we also understand that the estimated capital cost of a LOCSD infiltration treatment plant is approximately $3.8 million, and $7.4 million for an MBR treatment plant.
The cost estimates in the City's recent Study are preliminary, but assuming Alternative 3 (the MBR option) is implemented at an estimated cost of $15.3 million, and a capacity of 120,000 gpd is provided to the LOCSD, your capacity and buy-in cost would be in the neighborhood of $2.5 million. We realize your final decision whether or not to purchase treatment plant capacity from the City of Solvang will require several months to consider. However, we are requesting a response as to your interested in Public Works Department 411 Second Street Solvang, CA 93463 353 discussing the possibility of purchasing treatment capacity in the Solvang Plant, and if so, how much capacity are you interested in, and approximately when might you be able to provide the City a firm answer? We look forward to hearing back from you soon. If you have any questions please don't hesitate to contact me at (805) 688-5575.
Sincerely,
� ��
Matt van der Linden, PE
Public Works Director/City Engineer
Copy. Brad Vidro, City Manager
Nathan Giacinto, Wastewater Division Supervisor
Public Works Department 411 Second Street Solvang, CA 93463 354